A letter, representing 60 hospitality businesses in Donegal, has been sent to every TD in the county detailing that it is now 'make or break' time for the sector.
Ahead of Budget 2021, the document outlines that 5,500 local jobs are at risk and urgent Government supports are needed.
Prior to Covid-19, tourism businesses across Donegal supported 7,500 jobs and generated €249 million in revenues annually for the local economy.
This year with local tourism struggling under immense financial difficulties, it's estimated that almost 75% of those jobs are at risk:
Failure to act now would do irreparable damage to the long-term viability of our industry and our ability to act as an engine for growth throughout the entire country. A severely devastated tourism sector would be a major loss both nationally and locally to our economy and wider society for many years to come. This can and must be avoided.
Urgent and unprecedented intervention from the Government is now required to support tourism businesses and safeguard thousands of jobs throughout the sector. This must form a central plank of the upcoming Budget.
Four Urgent Government Supports Required in this Year’s Budget:
1. Employment Wage Subsidy Scheme (EWSS) – if jobs are to be retained, the EWSS rates of support must be increased to the previous TWSS levels of €350/€410 per week for businesses that can demonstrate a 50% reduction in turnover for a 12-month period to 31 March 2021. The period for calculating the existing 30% reduction should also be extended on a similar basis. This would make it possible for employers to retain staff during the difficult winter/spring months ahead and to facilitate training and upskilling structures designed to allow employees get personal benefit from this challenging period and to help the industry prepare for post Covid-19 recovery opportunities. Payments should be made on a weekly basis to assist with cashflow. The scheme should be continued until the impact of Covid-19 restrictions has fully abated.
2. Reduction in Tourism VAT to 9% – permanent restoration to 9% to assist recovery and secure a viable and sustainable future for tourism. Reducing VAT will not only provide a stimulus in the Irish economy but also improve our competitiveness as an international tourism destination. VAT on Irish Hotels is currently the second highest in Europe and higher than 30 European Countries.
3. Liquidity Measures - Additional liquidity measures are required to help fund hotels during the coming months as a result of the cash flow lost out due to Covid-19 restrictions, including an extension of the moratorium on bank term loans from 6 months to 12 months.
4. Local Authority Rates Waiver - The waiver period should be extended for tourism businesses to coincide with business interruption due to Covid-19 and for a minimum of 12 months. After that, payment of local authority rates should be based on reduced levels of activity due to the crisis and until the industry has recovered.