Fine Gael TD for Galway West & Mayo South

Parliamentary Question no. 544 on Tuesday, 15th May 2012

* To ask the Minister for Transport, Tourism and Sport his views on extending the lower VAT rate which was introduced with the jobs initiative in 2011 and has had a very positive impact on tourism across the regions and in particular in sustaining and creating jobs in one of our most important indigenous industries.

 

Reply:

 

The Jobs Initiative in May last year recognised the vital contribution of tourism to employment, economic activity and foreign revenue earnings.  The VAT reduction on a range of tourism services from 13.5% to 9% enhances the competitiveness of tourism businesses.  The Visa Waiver Scheme is encouraging visitors from emerging markets to add Ireland to a trip to the UK and the halving of employers’ PRSI for those on modest wages will significantly reduce the cost of employing people.

Following discussions with the Minister for Finance, I was able to confirm last week that the lower rate of VAT will be maintained during 2013.  This will allow businesses, tour operators and customers to plan for the 2013 season, including The Gathering 2013 which was launched here at home last Friday.

Early indications are that the policy of lowering the VAT rate is working. Employment among accommodation and food providers has increased by around 6,300 since July 1st last year. The VAT reduction has also enabled businesses to be more competitive and offer lower prices to their customers.

2011 saw a welcome recovery in overseas visitor numbers with year-on-year growth of 6%. According to preliminary results from the Fáilte Ireland Hotel Survey, for the first nine months of 2011, hotel room occupancy rates improved compared to 2009 and 2010, up to 61% from 58%.  Furthermore, according to Hotels.com, Ireland continues to have the most competitively priced hotel beds in Western Europe.

I understand that industry and trade partners are positive about prospects for the year, with reports of advance bookings and inquiries being up on this time last year and they are hopeful we can achieve our target of a 4.5% increase in visitor numbers in 2012.

 

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