Brexit risks a repeat ‘recession effect’ on Ireland’s pubs and hospitality sector
After nine months of speculation, parliamentary debates, appeals and court judgements, British Prime Minister Theresa May has triggered Article 50 of the Lisbon Treaty, formally beginning the UK’s withdrawal from the European Union. Over the next two years or, as is more likely, much longer, Ireland, alongside our departing neighbour, will undergo unprecedented change. Despite the desire for a soft border between our two countries, we face the prospect of a manned one, while our tightly interwoven trade relationships, worth €1.2 billion a week, may be at risk from new speculative tariffs and taxes.
In the last quarter-century, Ireland’s population has increased by over one million. Before the recession, we were one of the world’s most affluent countries, and now despite it, we are one of the EU’s fastest growing. Brexit, however, has the potential to impact our internationally envied recovery by threatening our most important industries. Like our high-tech IT and pharma sectors, tourism is essential to Ireland. 2016, the centenary of the Rising, was our best ever year for it. Over nine and a half million people visited.
But with more than 40 percent of all tourists in Ireland originating from the UK, will the sector be jeopardised by a hasty or poorly negotiated Brexit that results in a hard border or, more immediately, a weak pound? We are already feeling this effect. According to new figures from the CSO last week, visitor numbers from the UK dropped by over 49,000 from December 2016—February 2017 compared to the same period in the previous year.
Diversification and preparedness is essential for any industry, especially in such a profoundly uncertain political and economic climate. Ireland must look elsewhere to grow its tourism sector, particularly to more stable mainland Europe and North America, and to emerging markets in Asia, like China and India.
Furthermore, investment in tourism and hospitality must be spread around the country. Dublin alone cannot do all the heavy lifting, and that means developing new initiatives to boost visitor numbers to the countryside. Rural Ireland suffered disproportionately during the downturn—infrastructurally, economically and socially—and many would fairly argue that it has still yet to feel the full effects of recovery.
The tourism and hospitality sector, on which much of rural Ireland depends, was devastated by the crash. Thousands of venues were closed, resulting in huge job losses and fewer places for local communities to gather and socialise. Specifically, 1,442 pubs, or 16.7% of all pubs, closed between 2005 and 2016. Within a short space of time, the main streets of towns and villages off the main tourist trails became shuttered up and derelict. Brexit could easily duplicate this ‘recession effect’ if we are unprepared.
Earlier this year, Minister Simon Coveney announced the National Planning Framework (NPF), a new long-term initiative designed to accommodate a growing population and economy, nationally and regionally, over the next 25 years. We at the Drinks Industry Group of Ireland (DIGI) believe that a strong and reinvigorated rural Ireland is key to realising the country’s full potential and to fulfilling the Government’s objectives.
‘Support Your Local’ is a DIGI campaign which seeks to highlight the positive contribution the industry makes to the economic, cultural and social fabric of Ireland, nationally and locally, while also calling for Government supports to ensure the continued growth and development of the industry.
As it stands today, pubs, hotels, restaurants and off-licenses support 204,000 jobs, or 10 percent of the entire economy. The drinks industry alone, including brewers and distillers, supports 92,000 jobs in towns and villages nationwide. Ireland’s pub culture and hospitality sector is consistently ranked as one of the top attractions for tourists. We are witnessing constant innovation, investment and a revolution in the sector, for example in Irish whiskey, with sixteen distilleries in operation up from four only a few years ago. Similarly, the brewing sector is thriving, with renewed interest in products and growth in exports.
In our NPF submission, we have outlined a number of key policy proposals, including initiatives to regenerate vacant high streets and bring local communities back together. This will boost quality of life and tourism potential. Our submission also includes taxation policy proposals designed to support and encourage the hospitality sector to invest in its offering, grow and create jobs across the country.
During such an historic period of economic and political upheaval, we must seize the moment and strive for more. New revenue streams and ongoing job creation in tourism and hospitality will allow us to see off external threats like Brexit and more evenly bring economic recovery and prosperity to all parts of the country.
Padraig Cribben is a member of the Drinks Industry Group of Ireland (DIGI) and CEO of the Vintners Federation of Ireland.