News

Tourism 2020 Update

05 September 2014

Tourism 2020

The Northern Ireland Hotels Federation has updated its wide ranging report on the tourism industry. The report, “Tourism 2020 - Investing in our future”, calls for an updated ‘more cohesive’ tourism strategy, and a drop in the VAT on hotel accommodation, out of home meals and visitor attractions, amongst other measures. The report can be downloaded from this page.

The Tourism 2020 report, prepared by the Federation with supporting research from Oxford Economics and ASM Chartered Accountants highlights how the sector could significantly grow the number of people it employs and the revenue it generates through building on recent successes such as ‘2012 – Our time, Our place’.

NIHF Chief Executive Janice Gault, said the paper was aimed at building on recent Executive sponsored successful initiatives, and the adoption of good ideas which have worked well in comparative markets.

“Hospitality and tourism, as an industry, directly employs around 60,000 people in Northern Ireland, supports many other jobs in the wider economy and contributes £860m to the economy annually. However, the Federation believes that we can do better, employ more people, train these people better and bring more money into the local economy. In short, Northern Ireland has the potential to greatly increase its tourism economy to catch up with other nearby regions.”

The report outlines ‘the five Ts’ or five areas where the Hotel federation wants to work with government and the wider tourism industry to achieve greater success:

  • TOURISM: Medium-term strategy for the whole sector
  • TAXATION: Reduction in VAT to 5%
  • TARGETS: Study on the long-term future of tourism
  • TRADING: World-class events and cohesive marketing
  • TRAINING: Delivery agency for tourism and hospitality

 

NIHF President Mandy Patrick MBE added,

“We believe that the industry needs an agreed, over-arching tourism strategy supported by all departments. This strategy needs to focus on growth and set out clear and concise responsibilities. A draft strategy was written in 2010 but it has never been adopted. The NIHF believes that the formal adoption of a strategy would result in the Northern Ireland Assembly taking a more cohesive approach to the industry and would reinforce the message that tourism is being taken seriously. A strategy should set out the contribution tourism currently makes and put in place the building blocks for the future.”

Nine departments in the Northern Ireland Assembly, as well as every local council, directly affect tourism and hospitality. The introduction of a new council structure, as set out in the Review of Public Administration, is a real opportunity for the future of Northern Ireland tourism. This reduced council structure has a key role to play in driving the tourism economy forward.

There is also influence at a national level from Westminster. The NIHF is keen for the Assembly to highlight the challenges of regional tourism and raise these at a national level. Northern Ireland is in a unique position. It is part of the United Kingdom on a political level but is marketed with the Republic of Ireland as a single island destination for tourism purposes. Janice Gault says the sector understands that changes to the VAT rate are not devolved, but added that the Finance Minister, Simon Hamilton, has clearly understood the importance of the issue. The sector has now called on the Executive to make the issue a staple in its negotiations and communications with the Treasury.

Northern Ireland’s relatively high rate of VAT puts it at a distinct disadvantage to other European countries - particularly the Republic of Ireland. Given the proven responsiveness of visitor arrivals/expenditure to changes in tourism taxes, a VAT rate cut to 5% could lead to increased demand and provide a much needed stimulus to the industry – leaving it well positioned to benefit from strengthening consumer and business confidence in the UK economy. Our study shows that not reducing VAT could cost the NI economy £128m in lost economic potential over the next six years.”

 

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