Ms Elaina Fitzgerald Kane:

I thank the committee for the invitation to speak on the issue of developing rural tourism in Ireland. ITIC is the main representative body for all tourism and hospitality stakeholders throughout the country.

Tourism and hospitality is the country’s largest indigenous industry and biggest regional employer. There are 20,000 businesses in the sector, the vast majority of which are SMEs, and latest Central Statistics Office, CSO, figures show approximately 250,000 people work in the industry, 70% of whom live in regional Ireland. Covid-19 hammered the sector. Fáilte Ireland estimates that, net of generous Government supports, the tourism industry lost €6 billion as a result of the pandemic. Thankfully, over the past 12 months, recovery has been strong. However, there is a feeling of nervousness about 2023, with soaring costs of business, weakening economies here and overseas, the reduction in supply as a result of Government contracts with tourism accommodation suppliers and a proposed increase in VAT. It is fair to say that competitiveness is a key challenge.

I am here to talk about developing rural tourism. This is a subject close to my heart as, together with my family, I own Fitzgeralds Woodlands House Hotel & Spa in Adare. Working with a fantastic team of 270 great people, I see first hand the importance of tourism in our community in terms of local businesses, suppliers and sponsorship. There are large parts of the country where tourism is the only show in town and where it has a far bigger impact than the likes of agriculture, manufacturing or foreign direct investment, FDI. Therefore, maximising tourism’s potential in all parts of the country is critical.

For this meeting, ITIC has four important points to raise, the first being the importance of regional airports. Direct air access is critical to the regional spread of tourism. Dublin Airport is in a dominant position but other airports in the country need to be supported to allow for direct air access to the regions. In this context, we urge Government to expand its investment to Cork and Shannon. EU state aid rules offer the opportunity to extend state investment aid to all airports with passenger numbers below 3 million. However, the threshold set by the State for airports wishing to access funding under the regional airports programme, RAP, is currently set at 1 million passengers per annum. ITIC is of the view that there needs to be alignment of Irish and EU policy. The threshold relating to RAP in Ireland should be increased to achieve this.

The second point is the impact of Government contracts on reducing tourism accommodation supply. In regional Ireland, 35% of all tourism beds have been given over to the Government for Ukrainian refugees and asylum seekers. Looking at County Donegal by way of example, over 50% of tourism beds are contracted to the Government, as are 39% of beds in County Clare and 37% in County Kerry. Not only will this have an undoubted impact on the availability and price of the remaining tourism beds, but, worryingly, downstream tourism businesses such as restaurants, attractions, inbound operators, and activity providers will all miss out on the tourism dollar. Fáilte Ireland estimates an annual loss of earnings of €1.1 billion. We urge Government to make a provision for downstream businesses for the current season.

The third point relates to the opportunities within sustainable tourism. The Irish tourism industry is fully behind the ambitious targets of Ireland’s climate action plan. Ireland's tourism businesses intend to fully play their part in this and some great work is already being done. However, the majority of Irish tourism and hospitality businesses, particularly in regional Ireland, are SMEs with modest profit margins. Therefore, a step change in funding supports will be required to enable industry to achieve some of the bigger-ticket sustainability goals such as green energy, electric vehicles, EVs, and retrofitting. We are delighted to see the EU just transition funding put in place as a great example of what can be done.

The fourth and final point is around developing our regional transportation infrastructure. Currently, one out of every three holiday-makers uses car hire. However, post-pandemic rental car fleets are only at 60% of 2019 levels. We are urging Government to reinstate the pre-2019 VAT on the VRT repayment scheme to increase in supply of rental cars in Ireland and to ensure the pipeline to regional Ireland is not constrained. Tourism is the lifeblood of so many communities in Ireland. As it stands, Irish tourism is not expected to recover to pre-pandemic levels until 2026. Continued Government support in respect of the matters raised today is critical to ensuring that we stay on course for recovery.

I thank the committee members for their time. I will be happy to answer any questions they may have.