Mr. Eoghan O'Mara Walsh:

I thank the committee for the opportunity to discuss tourism's opportunities and challenges. ITIC is the umbrella representative group for tourism business interests. From airlines and sea carriers to hotels, attractions, restaurants and tour operators, since 1984 ITIC has been making the case for tourism and just last month published a blueprint for the sector's success - Tourism: An Industry Strategy for Growth to 2025, which I am happy to circulate to members.

Tourism is Ireland's largest indigenous industry. It employs 230,000 people throughout the country, which equates to one in every ten jobs, and it is the only industry that can develop long-term sustainable jobs in both urban and rural Ireland. It is a thriving export sector. Last year, earnings from overseas visitors topped €4.9 billion as 8.9 million tourists came to our shores. It is within the prism of tourism as an export sector that ITIC devised its strategy for the sector and with the right policies and investment strategies, the export value of tourism can grow by 65% to more than €8 billion annually by 2025. That would mean a further 80,000 jobs nationwide and almost €2 billion in returns to the Exchequer in direct tourism-related taxes annually.

Some media and political commentators have taken the view that there is no need to develop a strategy for the future when everything is going so well for tourism at the moment. Our counter-argument is that the time to fix the roof is when the sun is shining. Tourism has vastly more potential for this country and its regions but, as a sector, it cannot be taken for granted. The correct strategy must be pursued, supported by State agencies, and, crucially, enabled by Government.

The current national policy for tourism – People, Place and Policy – was published three years ago by the Fine Gael-Labour Party Administration. At the time, ITIC felt that the policy lacked ambition and we have been proven right. The 2025 targets in that policy have nearly been met. It is now outdated and has been overtaken by both the industry's success and external events such as Brexit. It is time for a new roadmap and that is what ITIC’s strategy aims to achieve.

Irish tourism’s success has been led largely by the private sector. In the next three years alone tourism businesses will spend €2.5 billion on new hotels, aircraft, ferries and visitor attractions. The industry also spent a whopping €92 million in overseas marketing last year. The State must also play its role in investment. The Government and previous Government got much right on tourism taxes, particularly the VAT rate and airport passenger duty, APD, but it has been found wanting in investment in both tourism product development and overseas marketing. State funding for tourism is down 25% or €40 million, since 2008 and Government support for tourism is a vital enabling factor if future success is to be achieved. This year, the Government has only allocated €113 million in current spending to Fáilte Ireland and Tourism Ireland. This needs to increase by €50 million to help achieve the goals relating to Exchequer returns, revenue and jobs outlined in our strategy. Likewise a capital investment analysis shows the State grossly under-investing in tourism. Only €300 million of the recent €91 billion ten-year national development plan was earmarked for tourism. As a country we must develop new projects to see and do of scale and international appeal and often the State must be the first mover in this regard. The shining example of this is the Wild Atlantic Way.

Brexit is the big challenge to Irish tourism and is likely to remain to be so in the next few years. The British market – Ireland’s single largest source market for visitors – is in retreat and this is a very worrying trend. It has reduced by approximately 5% over the past 12 months. Crucially, within any new EU-UK deal the common travel area and a soft border must remain in place. Anything that impedes the free movement of people within the island of Ireland or between Britain and Ireland would be seriously damaging to tourism. Likewise, a liberalised aviation market and a harmonisation of regulatory standards between post-Brexit UK and Ireland are critical.

Tourism: An Industry Strategy for Growth to 2025 is the result of 12 months of extensive consultation and research with the tourism and hospitality industry throughout the country. There are 56 policy recommendations within the strategy and they act as the considered and informed views of the tourism sector. This roadmap for tourism’s success may be industry-led but it needs to be Government-enabled and agency-supported. Tourism’s role needs to be positioned and defined as a significant economic engine within the national accounts. In that context ITIC also proposes a national tourism day, the like of which is marked in the USA, Canada and England as well as in the EU and the United Nations, to raise the profile of the industry and celebrate the importance of tourism in Ireland. Our sector employs one in ten people nationally, contributes billions of euro to the economy in taxation, and impacts positively on communities and cities throughout the country. There are 20,000 businesses involved in tourism and the sector crucially cannot be outsourced or offshored. It is high time that Ireland elevated tourism within the national debate and ITIC's strategy identifies clear opportunities as well as challenges for the sector in the coming year.