Press release

30 Apr 2020 Dublin, IE

Rural Ireland to be disproportionately affected by impact of COVID-19 on tourism

Tourism was one of the first sectors hit by Covid-19 and is likely to be the last one to recover.

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  • 18 percent of jobs in Kerry and 13 percent in Donegal directly dependent on tourism and hospitality sectors
  • US visitor numbers – typically 25 percent of all tourists to Ireland – likely to remain dramatically low after lockdown is eased
  • Rapid and sustainable financial support package required for Irish Tourism

Rural Ireland is likely to be disproportionately affected by the impact of Covid-19  and an ambitious and coordinated tourism plan from public and private stakeholders should be considered to prevent the industry from faltering, according to a new report by consulting and professional services firm, EY Ireland.

Pre-crisis, the accommodation and food sectors accounted for 179,200 jobs in ROI. Today 12 percent of those workers are availing of the Temporary Wage Subsidy Scheme. Tourism was one of the first sectors hit by Covid-19 and is likely to be the last one to recover. An estimated 18 percent of jobs in Kerry and 13 percent in Donegal are directly dependent on the tourism and hospitality sector, compared with 10 percent in the capital and 10 percent in Cork, with many more supported through the supply chains and associated wages.

As a result, these rural regions are markedly less resilient than others to COVID-19 shocks and will be directly impacted, with fewer alternative sectors that could compensate for job losses.

The development of Irish Tourism is at the heart of the Project Ireland 2040 aspirations to build a more sustainable and resilient economic model, less dependent on Dublin, with a higher focus on indigenous rather than multinational business. It is also an industry that provides joy and inspiration, that helps to energise us, and it acts as a gateway for people to experience our society and all it has to offer.

Given Covid-19’s scale and impact on global travel, just before the peak tourism season, current forecasts estimate the effects will be felt globally for more than two years, although this could vary from one country to another.

Simon MacAllister, Valuation, Modelling and Economics Partner, EY Ireland commented:

Between 2009 and 2019 there was a 56 percent rise in overseas trips to Ireland by non-residents, but we have seen a near overnight reversal of this as a result of Covid-19. Tourist behaviour will undoubtedly be impacted in the long-term by this pandemic, for geopolitical, economic and possibly psychological reasons.

While intra-EU bookings can be made on a “last minute” basis, this approach is unlikely for American tourists, who represent over a quarter of overseas visitors to Ireland every year. The loss of this lucrative market is a concern, given their typically higher daily spend and length of stay versus tourists from other countries.

Co-ordinated plan required

In the short term, the report recommends implementing a rapid and sustainable financial support package, tailored to the needs of each tourism sub-sector, alongside strategic operational supports. Firms within the sector will also need to adapt their business plans to respond to fast-evolving government restrictions and to target new, local markets.

These measures should be followed by a forward-looking plan. This should aim to build resilience and to capitalise on opportunities in new travelling trends that may exist post-crisis such a greater desire to take holidays in un-crowded, rural locations.

As a destination, Ireland has consistently punched above its weight for the last decade and a coherent and consistent ‘Team Ireland’ approach to promoting our attractiveness at home and overseas will be vital for recovery.

Yannick Cabrol, Economic Strategy Manager, EY Ireland, said:

“After the immediate health concerns are addressed, it’s assumed that people will have less disposable income due to the economic impact of the pandemic. They are also likely to have a reduced willingness to travel far from home. A common view that the ‘grass is always greener’ elsewhere and that extensive international travel is essential to human happiness is, some suggest, being challenged.

“While we must continue the longstanding Irish tradition of welcoming overseas visitors with our famous hospitality, many are turning their thoughts to how we can better enjoy our own national heritage and local natural beauty. Growing domestic and sustainable tourism will be essential elements of the recovery.”