Leo Varadkar (Dublin West, Fine Gael)

The Deputy's question relates to the number of jobs created in the tourism sector as a result of the lowering of the VAT rate for the tourist industry. As the Deputy will be aware, the jobs initiative introduced a reduced 9% VAT rate from July 2011 on a range of services, including hotels, restaurants and the leisure industry. The Government also halved employers' PRSI for those on modest wages and introduced a visa waiver scheme, which makes Ireland more accessible for tourists from important emerging markets.

It is too early at this stage to definitively assess the impact of these measures on tourist numbers or employment in the sector. We will need to consider the figures over a longer period to properly assess the impact of the initiative. It will be later this year before a view can be formed on the effect of these measures on competitiveness and employment. I am, however, pleased to report that overseas visitor numbers increased by 7.8% in 2011 by comparison to 2010. This growth has continued into 2012, with trips to Ireland for the first three months up to February 2012 having increased by 2.7% as compared to the corresponding period of December 2010-February 2011. I am also encouraged that seasonally adjusted employment as measured by the CSO in accommodation and food services increased by 11,000 during the nine month period to end December 2011.

Improving the perception among domestic and overseas visitors that holidaying in Ireland offers good value for money was an important part of the jobs initiative. In this regard, I draw the Deputy's attention to the most recent Consumer Price Index which shows that in the year to February 2012, the price index for restaurant and hotels was down 0.3% and for recreation and culture related products and services was down 0.9%. As such the sector is becoming more competitive. The overall CPI was up 2.1% during the same period. These price reductions were driven by a wide number of factors, including the VAT reduction, and are showing the increased competitiveness of the Irish tourism market.

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