The continuing decline in the value of sterling against the euro will have a damaging impact on the Irish economy in the months ahead, particularly in rural Ireland, and will seriously impact the Government’s ability to deliver on 50,000 new tourism jobs, warned Donall O’Keeffe, secretary of the Drinks Industry Group of Ireland (DIGI). The VFI is a member of DIGI.
This week sterling reached its lowest level against the euro since 2009, the height of the financial crisis. Global financial services company Morgan Stanley has warned that sterling and the euro will reach parity by the end of this year.
According to research conducted on behalf of Tourism Ireland, British people are less likely to travel in the wake of Brexit, and when they do, they intend to spend less. UK visitors to Ireland dropped by 6.5% in the first half of 2017.
Furthermore, the continuing decline of sterling will only further encourage cross-border shopping and damage Ireland’s competitiveness as a tourist destination. The latest figures available on cross-border shopping from InterTrade Ireland shows this economic phenomenon is at its highest levels since 2009, again echoing the financial crisis.
These factors combined will seriously hamper the Government’s ability to achieve its target of 50,000 new tourism jobs by 2025.
Commenting today, Donall O’Keeffe, secretary of DIGI said: “Sterling is now at its weakest level against the euro in eight years. The growing belief is that as Brexit progresses without clarity, sterling will continue to decline against a strengthening euro. This will further undermine our tourism offering by making Ireland a less affordable destination for overseas visitors.
“The Government has targeted the creation of an additional 50,000 jobs in the Irish tourism sector in its ‘Realising Rural Potential’ action plan. However, if our largest tourism market is finding Ireland too expensive to visit, it will undermine this target.
“The drinks and hospitality sector employs 92,000 people throughout Ireland and supports 210,000 jobs in the wider economy. The sector is vital to rural Ireland in particular in counties like Kerry where the industry supports 10,828 jobs and in Roscommon where the sector supports €19.5 million in wages each year.
“Ireland’s largest tourism market is the UK. British visitors account for 40% of all our overseas visitors. The UK is also our largest competitor from a tourism perspective and as their destination becomes more affordable, it creates a real challenge for the drinks and hospitality industry as international visitors may choose the UK over Ireland, especially when we have the second highest levels of excise tax on alcohol in the EU.
“We are now in a situation where Brexit is impacting on the tourism sector and we need the Government to act, rather than react. That is why we are calling for a Brexit Budget this October that will see the tourism and hospitality sector protected and supported.
“One of Ireland’s unique tourism offerings is the Irish pub and we our hampering our own tourism product with excessive taxation. Ireland has the second highest levels of excise tax on alcohol across the European Union. The challenges of Brexit for the Irish economy are real and they need to be addressed. To counteract these uncertain and difficult times, the Drinks Industry Group of Ireland is calling for a ‘Brexit Budget’ with clear and actionable measures, including a reduction in alcohol excise.”
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