Nearly half (49%) of Irish pubs and restaurants have reported a decline in tourists to their businesses over the past 12 months, according to a new survey published today.
The survey found that 75% of business owners are concerned about Brexit and believe that the uncertainty it causes will impact consumer spending here in Ireland.
Of those concerned about Brexit, 55% were most concerned that a drop in sterling makes Ireland more expensive for British tourists, while one in six were most concerned about cross-border shopping for cheaper alcohol.
Commissioned by the Drinks Industry Group of Ireland (DIGI), and conducted among 660 pub and restaurant owners across the country, the survey was designed to track sentiment of hospitality businesses following Brexit.
Most businesses surveyed were SMEs, with over 50% employing six or fewer.
Advising the Government on policy measures to safeguard the industry against Brexit, over 70% said Government should avoid any additional costs to businesses arising from policy decisions and regulation measures, while 72% recommended an excise tax reduction.
Other survey findings include:
- 98% of respondents believe that Ireland’s excise tax rate is too high – Ireland has the second highest excise tax in the EU, behind Finland.
- 77% of respondents said that business running costs had negatively impacted their business in the past 12 months, while almost one fifth said a decline in tourist numbers had a negative impact.
- 71% of business owners have plans to invest in their premises in the next three years, with almost a third (30%) indicating they would create jobs.
- Almost 70% of Irish pubs and restaurants have increased their use of social media in the past three years, while 73% have refurbished their premises.
- Almost two thirds of respondents (65%) rated the UK as the most important tourism market for their business while 13% rated the rest of Europe and one in ten rated North America as most important.
According to CSO statistics, there has been a 6.2% decrease in the number of UK tourists visiting Ireland in the period January to July 2017, compared to the same period last year.
This has particularly affected the food and drinks industry, which relies heavily on British tourism, according to Donall O’Keeffe, Secretary of DIGI and CEO of the Licensed Vintners Association (LVA).
“Tourists from the UK spend 40 percent of their budget on food and drink compared to 34 percent for the average tourist. Any decline in UK tourism numbers is a worry, and our survey results show that it is a reality. Action needs to be taken: Ireland’s drinks and hospitality sector is a major employer and contributor to our economy, and many of its SMEs have invested in their business in recent years. We must ensure we continue to support these businesses’ ongoing growth and development.
“One key measure is a reduction in our excise tax rate. Ireland has the highest excise tax on wine, the second highest on beer and the third highest on spirits. Our excise tax is 19% higher than the UK’s, our nearest neighbour. Without any change to this country’s high, even punitive, excise tax, a continued drop in sterling will further undercut Ireland’s tourism competitiveness. Fewer British tourists will patronise the drinks businesses that are so important to the tourism sector.
“The Government must act now. Our survey shows that our businesses will be severely affected by Brexit. In this year’s Budget, Minister for Finance Paschal Donohoe must prioritise pro-enterprise and pro-growth measures for the drinks and tourism sector, like a reduction in excise tax,” said Mr O’Keeffe.
Next week, DIGI will publish its Brexit report which looks at the challenges of Brexit to the drinks and hospitality sector. Authored by DCU economist Anthony Foley, ‘The Economic Impact of Brexit on the Drinks and Hospitality Sectors’ puts forward recommendations to safeguard the sector that employs over 92,000 people directly and 210,000 indirectly.
The industry represents a total of 7,193 pubs, 3,161 off-licences, 2,406 restaurants, 983 hotels, 483 wholesalers and 98 producers that purchase €5.7 billion in materials and services, pay €2.9 billion in wages and deliver €6.4 billion in tourism spend each year, in cities, towns and villages.
Tags: