Trump Mark 2 means the next Government must seriously support domestic industries

The Irish tourism and hospitality industry is no different. With demand mixed in 2024, costs of business and squeezed margins have been the recurring themes around board tables.

All the main parties have now published their full manifestos and each has outlined a suite of business supports. 

Fianna Fáil, Fine Gael, and Sinn Féin have proposed an employer PRSI rebate to help mitigate some of the labour costs businesses are wrestling with. 

RESULTS: GENERAL ELECTION 2024

Scroll for results in your area

Cork East

Cork North Central

Cork North West

Cork South Central

Cork South West

Kerry

Clare

Limerick City

Limerick County

Tipperary North

Tipperary South

Waterford

Dublin Bay North

Dublin Bay South

Dublin Central

Dublin Fingal East

Dublin Fingal West

Dublin Mid West

Dublin North West

Dublin Rathdown

Dublin South Central

Dublin South West

Dublin West

Dun Laoghaire

Carlow/Kilkenny

Kildare North

Kildare South

Laois

Longford/Westmeath

Louth

Meath East

Meath West

Offaly

Wexford

Wicklow

Wicklow/Wexford

Cavan/Monaghan

Donegal

Galway East

Galway West

Mayo

Roscommon/Galway

Sligo/Leitrim

This has drawn immediate criticism from ICTU which has called the measure “an unacceptable misuse of money”. 

But the truth is that if state-induced labour costs imposed on employers had been better moderated, then enterprises wouldn’t be so desperately worried about a loss of competitiveness.

Thorny issue of Vat 

Tourism chiefs welcomed Fine Gael’s early pitch for support with its commitment to reduce the hospitality Vat rate to 11% despite the fact that the same party failed to deliver this in last month’s budget. 

Sinn Féin is proposing a lower 9% rate while Fianna Fáil and the Greens have focused on a business support fund to assist vulnerable companies.

As important as competitiveness is, an equally critical issue for the economy is that of connectivity. 

With no bridges, tunnels, or roads off the island, air access to Dublin Airport is of critical importance.

This is surely the biggest future handbrake on development for a country that is the textbook definition of a small open economy. 

All three main parties have acknowledged this and each states in their manifesto that, as well as supporting regional airport growth, they are in favour of lifting the Dublin Airport passenger cap. 

But none of them are brave enough to touch the thorny subject of “how”.

The current administration is quick to point out that much of the last programme for government has been delivered. 

As of earlier this month, this now includes a new national tourism policy which was published in the very final throes of the administration.

The previous iteration had a youthful Paschal Donohoe smiling from the inside cover as Tourism Minister, so what will be Catherine Martin’s tourism legacy? 

Well as was famously said about the French Revolution 200 years after it took place “it is too soon to say” and that’s certainly the case for Minister Martin.

She came out strongly and resolutely in favour of the industry during the existential crisis that was covid, securing multi-million grants that saved many businesses. 

Attention has drifted

But since the pandemic, there is a feeling that Government attention has drifted elsewhere and the sector hasn’t received the attention it warrants. 

A case in point is the new national tourism policy which was published with little fanfare and no media traction. Nonetheless, it is welcome that there is now a published commitment by the State as to how tourism is expected to fare over the next few years albeit its implementation will fall to the next Government.

It is a truism that parties “campaign in poetry and govern in prose” and all manifesto commitments are likely to be watered down once coalition negotiations take place. 

It is important though that tourism issues are kept front and centre. The sector is Ireland’s largest indigenous industry and biggest regional employer — twice the size in terms of jobs than agriculture.

With Trump Mark 2 and likely trade tensions, tariffs, and tantrums, Ireland’s FDI sector may come under some pressure.

The next Government needs to seriously support homegrown domestic industries.

It is clear that issues relating to a key indigenous industry such as tourism and hospitality — from competitiveness to decarbonisation — all have economic arguments at their core.

Tourism needs a whole of Government approach due to its strategic importance and policy must be formulated in the next Dáil primarily through an economic lens.

• Eoghan O’Mara Walsh is CEO of the Irish Tourism Industry Confederation