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Tourism industry says VAT deferral scheme vital

The Irish Tourism Industry Confederation (ITIC) has said a VAT deferral scheme is vital to alleviate serious cashflow pressures in the tourism and hospitality sectors.

The representative body said immediate action is critical because thousands of jobs are at stake due to the volume of cancellations and lack of future bookings.

“Coronavirus is first and foremost a public health issue but the business and economic implications are stark,” said Eoghan O’Mara Walsh, CEO of ITIC.

“We fear that thousands of tourism jobs will be lost in the next few weeks and are urging Government to do all within its power to support the county’s largest indigenous industry and biggest regional employer.”

In order to alleviate cashflow pressures, ITIC has called for VAT payments due on March 19th to be deferred for tourism and hospitality businesses.

This happened during the Foot and Mouth Crisis in 2001.

The call was backed by other industry groups, including the Irish Hotels Federation, the Restaurants Association of Ireland, the Association of Visitor Experiences and Attractions and other ITIC members.

The call came as new data released by the Central Statistics Office today showed the number of overseas trips made to Ireland rose just 1.8% last year.

In total 10.808 million visitors came here during the 12 months, compared to 10.616 a year earlier.

Those travelers from abroad stayed a combined 70.4m nights here, down 0.7% on 2018.

The tourists spent a total of €6.867bn in the Irish economy during the year, down 0.1% on the same period the year before.

Fares accounted for €5.101bn of that, a drop of 0.9%.

The small increase in visitor numbers and reduction in spending is a consequence of lower volumes of tourists coming from the UK as a result of Brexit uncertainty and a decline in tourists from the US.

“Our focus now is very much on 2020,” said Niall Gibbons, CEO of Tourism Ireland.

“The outbreak and spread of Covid-19 (coronavirus) is having a significant impact on travel and presents an unprecedented and extremely serious situation for Irish tourism.”

“2020 was already going to be a challenging year for tourism, with issues like Brexit and the delayed delivery of the Boeing 737 MAX aircraft; Covid-19 is an extremely serious development which is affecting all of our key source markets.”

“We are in daily contact with our tourism industry partners and we know that they are reporting significant cancellations and very few new bookings.”

“We continue to monitor the situation closely and are reviewing our promotional activity on a market by market basis and on a daily basis. Tourism Ireland will be ready to roll out an extensive kick-start programme, when the time is right.”

During the final three months of the year, the volume of overseas trips to Ireland by non-residents did increase 0.5%, to 2.425m.

The number of nights spend here by visitors was 0.4% lower though compared to the last quarter of 2018.

The average time spent here by foreign visitors who came during the last four months of the year was 6.2 nights compared to 6.3 nights a year earlier.

Earnings from overseas tourists during the period were €1.378bn, down 1.6%.

Trips by Irish residents travelling abroad rose 2.8% over the quarter compared to the same four months in 2018.

On average, Irish people who went away during the period travelled for 6.5 nights.

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