Gabhaim buíochas leis an gCathaoirleach agus fáiltím roimh an deis seo labhairt leis an Seanad inniu faoi earnáil na turasóireachta agus faoi na dúshláin atá roimpi faoi láthair mar thoradh ar phaindéim Covid-19.
I welcome the opportunity to address the Seanad today to speak about the tourism sector and the challenges it is facing as a consequence of the Covid-19 pandemic. It is right and proper that the primary focus of the Government is on the public health crisis response. Nevertheless, we must ensure that we do our utmost to help our economy to recover from the worst short-term economic shock in the history of the State.
The tourism sector has made a huge economic and social contribution in recent years and played a leading role in driving the recovery from the last economic downturn. Tourism plays a pivotal role, particularly in rural and regional Ireland, with most earnings retained within the country. Heretofore, as a labour-intensive sector directly contributing to over 11% of employment, tourism has been a leading job creator, supporting 260,000 jobs in 2019 - Ireland's largest indigenous sector.
In normal circumstances, tourism provides diverse employment opportunities, including for those unable to work full-time. Tourism also provides employment in rural communities and other economically disadvantaged locations where alternative opportunities can be limited. Approximately 70% of tourism jobs are located in regional and rural areas outside of Dublin.
Tourism is a significant exporting sector, with the majority of tourism spending being generated by overseas tourists. In 2019, international tourists spent more than €5 billion in Ireland compared with approximately €2.4 billion spent by residents of Ireland, North and South.
Tourism is one of the most directly affected sectors in this current crisis. The impact of Covid-19 on tourism globally has been overwhelming and immediate, with unprecedented consequences for Ireland's tourism industry. Over the past four months, the Irish tourism industry has been decimated. The devastation being experienced in the sector is unprecedented, and I sincerely empathise with those who have lost their jobs or livelihood as a result.
Both international and domestic tourism has been very severely impacted by the Covid-19 crisis. International tourism has collapsed, and the OECD estimates that the impact of the crisis on the tourism industry could result in a 60% to 80% decline in international tourism in 2020, depending on the duration of the crisis and the speed with which travel and tourism rebounds.
Ireland's tourism sector is deeply dependent on overseas visitors, who account for 75% of overall tourism revenue. While increased domestic tourism will undoubtedly help make up for some of this, only a proportion of this activity could be expected to be offset by domestic tourism. Fáilte Ireland estimates that a write-down of 2020 overseas tourism business would mean an overall loss to the economy of €2.1 billion this year, with associated job losses of up to 180,000.
The July stimulus measures agreed at Cabinet last Thursday are a significant part of our response to the Covid-19 crisis and will help ensure Ireland's businesses get back on their feet and that as many people as possible can return to work when it is safe to do so. The Government is working on a longer-term national economic plan to be finalised in October, but the new supports are critical for the sustainability of the tourism sector and for the Irish economy as a whole over the coming months. They provide vital supports for businesses to retain existing jobs and to create new jobs, and they will help build confidence in consumers and communities throughout Ireland.
I worked very closely with my ministerial colleagues in Cabinet, and the measures announced provide much-needed supports to the tourism sector. The new employment wage support scheme will greatly benefit tourism enterprises, especially due to the labour-intensive nature of the sector. Both the temporary wage subsidy scheme and the new employment wage support scheme will run in parallel from 31 July until the temporary wage subsidy scheme concludes at the end of August. This will provide additional flexibility for employers with new hires and seasonal workers who were not previously eligible. The inclusion of seasonal staff and new employees is particularly welcome for the sector, which provides employment to thousands of seasonal staff, especially in rural areas.
To help businesses stabilise, reopen and redeploy their staff, enhanced direct grants will be provided from a revised restart grant. This grant was increased and extended, with an additional €300 million in funding being provided. These changes mean that a grant of up to €25,000 is available to more enterprises in the tourism sector. A number of businesses, such as bed and breakfast premises not previously included in the scheme, are also now eligible.
I am pleased that the Government found a way to assist the hard-hit bed and breakfast sector. Combined with Fáilte Ireland's adaptation fund, the restart grant will now greatly assist many more tourism businesses.
Covid-19 is having a devastating impact on tourism demand. The stay and spend initiative will help stimulate demand in the very challenging shoulder and off-peak seasons. This incentive, which will run for the period from 1 October 2020 to 30 April 2021, will incentivise taxpayers to support domestic providers of accommodation, food or both during the off-season, providing much-needed support to a particularly impacted sector. Revenue will provide an income tax credit of up to €125 per taxpayer, or up to €250 for a jointly-assessed married couple for spending on accommodation, food, and non-alcoholic drinks. The tourism and hospitality sector depends on high footfall and businesses are highly aware of the importance of implementing public health measures in preventing the spread of Covid-19. However, the social nature of the businesses means that adapting premises is another expense in a sector that has already suffered more than most. I was therefore very pleased to announce an adaptation fund of €26 million to help tourism and hospitality businesses to cover the costs of adapting their premises to meet public health requirements and make them safer for customers.
I am aware of how badly the coach tourism sector has been impacted by the crisis. These businesses are a vital part of Irish tourism and we will need them when our overseas visitors return. That is why I have asked Fáilte Ireland to develop a business continuity scheme to help these businesses through this very difficult period. Fáilte Ireland will now engage with the sector to develop this scheme, which has been allocated €10 million in funding. Further measures which will benefit the tourism sector include the €2 billion Covid-19 credit guarantee scheme, the package of liquidity and enterprise investment measures to support small companies and microenterprises, the corporation tax refund, the income tax relief for the self-employed, the warehousing of tax liabilities and the extension of the waiver of commercial rates for a further three months.
These measures will supplement the other supports already in place and the excellent work being undertaken by Fáilte Ireland and Tourism Ireland in supporting the tourism sector in its time of greatest need. The overall package of direct employment supports, cash grants, demand stimulation measures and tax reliefs will make a real difference to the bottom line of tourism businesses right now. I know that the tourism industry has called for other longer-term supports such as a change in the VAT rate. These will be considered as part of the work on the national economic plan in October.
As Senators are aware, the tourism recovery task force is preparing a tourism recovery plan which will include a set of recommendations on how the Irish tourism sector can best adapt and recover in the changed tourism environment. The plan will identify priority aims, key enablers and market opportunities for the sector for the period from 2020 to 2023. Since it first met at the end of May, the task force has undertaken a widespread stakeholder consultation process whereby any sectors and parties with an interest in tourism have been able to provide constructive inputs and innovative ideas on how this economically vital sector can adapt and recover in a meaningful and sustainable way. Furthermore, the task force has heard directly from several stakeholders in the past two weeks with a view to informing its deliberations as it works towards a final report. I expect the final report from the task force in the autumn and will carefully consider its recommendations at that time.
Fáilte Ireland recently unveiled its new national domestic marketing campaign, Ireland, make a break for it, to the tourism and hospitality industry and it has since gone live across all media. This is a major drive to encourage people to take domestic breaks this summer. I will be taking my family holiday in Ireland in the coming weeks and I encourage anyone who can to take the opportunity to enjoy our excellent tourism offerings. Fáilte Ireland research shows almost nine in ten people want to ensure that the appropriate safety measures are in place if they are to consider taking a domestic break in Ireland this year. Responding to these insights on safety, Fáilte Ireland recently launched a new Covid-19 safety charter, designed to stimulate demand and boost public confidence in the safety of tourism businesses. The charter, which is based on operational guidelines for tourism businesses, is now available to applicants on the Fáilte Ireland website. More than 1,000 businesses have signed up to it so far.
According to Fáilte Ireland's research, 60% of people are now planning breaks in Ireland in the next six months. Many intend to extend their short breaks from two or three nights to four nights, and 40% of those who intend to take short breaks booked them in the past two weeks, which is a significant increase on previous numbers.
Tourism Ireland is undertaking an extensive Covid-19 programme of research in our major markets to identify when consumers are ready to consider holidaying again and which of our markets offer us the best short-term prospects. This research is considering potential source markets and will then analyse when promotion of the island of Ireland should begin and where marketing should be targeted. The insights gained will ensure that Tourism Ireland's promotional plan is as targeted and motivational as it possibly can be in order to drive a strong recovery for tourism to the island of Ireland as quickly as it is possible to realise it. With regard to international tourism into Ireland, the tourism agencies are guided in all their decisions by public health advice. In line with the advice on non-essential travel, there are currently no paid advertising campaigns by Tourism Ireland in overseas markets about coming on holiday to Ireland.
The incidence of Covid-19 has been rising in Ireland over the past two to three weeks. This is aligned with the experience internationally. It is difficult to keep the virus suppressed while also easing restrictions. Overseas travel increases the risk of importing a higher incidence of the virus into the country. In order not to lose the gains we have worked so hard to make, now more than ever we need to stay vigilant and follow public health advice. Everything we are asking people to do is aimed at protecting the vulnerable and ensuring we can get to a point where schools can reopen and vital health services can be resumed. We cannot completely ban overseas travel because we are a small open economy and many people depend on trade for their livelihood. Many people need to travel to and from Ireland to carry out essential functions. There are also essential supply chains from overseas relying on these routes and connectivity to bring food, medicines and other products to Ireland that are critical to our health and for economic activity. Travel is also necessary to allow people to perform essential work, care for family members overseas and return to the country. For that reason, international travel must continue.
The agreement reached recently on the €750 billion European Union recovery package represents a very positive step. The package will consist of €390 billion in grants, with €360 billion to be distributed as loans to member states. The eligibility criteria for these funds include objectives that will provide supports for small businesses, tourism, culture and natural heritage, among a range of other areas.
I am under no illusions as to the difficulty of the task ahead, particularly with so many competing priorities. At the same time, given the importance of the sector, especially in regional and rural locations, I realise it is critical that we save as many of these jobs and businesses as we can. The July jobs stimulus measures agreed at Cabinet last week, the other supports already in place, together with the assistance being provided by Fáilte Ireland and Tourism Ireland will, I have no doubt, save many tourism and hospitality jobs and businesses all around the country. Together with the industry, the tourism agencies and the Department, I look forward to building on our natural advantages and working to ensure the sustainable development of tourism in the coming years.