Strong Sector Growth Must be Sustained

In recent years, Irish tourism has benefited from a number of important developments that have supported growth in overseas visitors to our shores, including economic upturns in our major overseas markets such as the United Kingdom and North America. Domestic tourism is also recovering, largely on foot of a strong uplift in Irish consumer sentiment, which is of particular importance to tourism businesses outside the main urban destinations and traditional visitor hotspots.

Having created over 33,000 jobs during the last five years, tourism is now a major source of new employment generation. Given the right economic conditions, the Irish Hotels Federation estimates that tourism has the potential to create a further 40,000 additional new jobs by 2021. Continued growth in the sector cannot be taken for granted, however, and anything that would jeopardise visitor numbers from our key overseas markets, such as the UK, would be a cause for concern.

Potential Fallout of Brexit

The importance of the UK market cannot be over-stated. The UK is Ireland’s largest source market for inbound tourism, accounting for approximately 40% of overseas visitors. Since 2012, visitor numbers from Great Britain have increased by an impressive 28%, reaching 3.55 million in 2015. This rebound has played a vital role in Irish tourism’s recovery, underpinned by an upturn in the British economy and an increase in Ireland’s competitiveness as a tourism destination.

A decision by the UK to leave the European Union could have potentially far-reaching consequences for Ireland given our nearest neighbour is also our largest trading partner. From a tourism industry perspective, the implications of such a decision would very much depend on the terms of engagement negotiated post-exit between the UK and remaining EU bloc. A critical factor would be the level of access to the EU single market secured by the UK, and this could have significant ramifications in the areas of transport, border controls, competitiveness, investment and currency stability.

The Irish Hotels Federation believes the most benign outcome for tourism would be for the UK to remain within the EU. This would remove the current uncertainty about the UK’s relationship with Europe and avoid potential negative impacts for the Irish economy, particularly in terms of trade, travel and competitiveness.

To date, the uncertainty has contributed to a significant fall in the value of sterling against the euro and there is a risk that sterling could fall further if the UK voted to leave the EU, reducing the spending power of visitors from Britain and Northern Ireland. On the other hand, a vote to remain in the EU could result in a strengthening of sterling, which would benefit Irish tourism.

More widely, a decision by the UK to leave the EU could have significant negative implications for employment in those businesses that trade between the two countries over time given the uncertainty that would exist during extended negotiations on a new trading relationship. This would pose risks for the domestic economy in Ireland and, in turn, Irish consumer confidence and domestic tourism. Similarly, any negative impact for the UK economy could result in a reduction in the number of British people traveling overseas, which would impact on Irish tourism.

Irish Tourism Sector at a Glance

Written by: Tim Fenn, CEO, Irish Hotels Federation – the national organisation of the hotel and guesthouse industry and the largest representative organisation within the tourism sector in Ireland 

See also:

• For further information on this topic, please visit our Brexit Centre
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