THIS year has seen a number of setbacks for the Irish tourism industry, especially in the Cork region, and as the summer season winds down with the children heading back to school next week and no great expectations for a significant visitor boost from this UK August bank holiday weekend, there is a much bigger threat ahead if a no-deal Brexit happens at the end of October.
At the start of 2019, the VAT rate on tourism goods and services was restored to 13.5%, having been reduced to 9% back in 2012 to help revive the industry after its collapse in the wake of the economic downturn of the late ‘noughties.’ This had the desired effect and overseas visitor numbers surpassed the government target of 10 million annually by 2025 seven years ahead of schedule last year.
However, areas like West Cork haven’t seen the same level of increase in overseas visitors in spite of the success of the Wild Atlantic Way and getting American tourists this far down the country has been dealt a huge blow by the confirmation that Norwegian Air is to cease its transatlantic services from Cork, Shannon and Dublin on September 15th next. The portents of doom were there even after the first year of operation when Cork flights were suspended for the winter and they did not really get going this year as passengers were routed through Dublin due to the grounding of their Boeing 737 Max fleet and operating with leased aircraft was not sustainable, according to the airline.
Norwegian’s arrival two years ago was touted loudly as a ‘game-changer’ for Cork Airport and did help grow passenger numbers. Their abandonment of the route is a blow that the Dublin Airport Authority, which controls Cork Airport, needs to react most urgently to, as Dublin and Shannon already have direct transatlantic routes with other airlines, but there is none now connecting Ireland’s second city and its hinterland, so finding an alternative carrier has to be the main priority.
The more immediate concern among tourism providers in West Cork is the fall-off in British tourists, going by anecdotal reports from various visitor attractions and others in the business. This is mainly due to the continued fall in the exchange rate of sterling for the euro and, of course, the huge uncertainty surrounding Brexit.
Visitor nights spent in Ireland are down by 3.2% and spending down 4%, while the Restaurants Association of Ireland predicts that one in five restaurants are likely to close if a no-deal Brexit happens. With the hospitality sector worth €2.2bn annually to the Irish economy and providing 8% of the country’s employment, it will need government minding to protect jobs in the turbulent times ahead.