Innovative policies can further catalyse recovery of Experience Economy
As communities across the country get ready to celebrate the first major St. Patrick’s Day celebrations in over two years, businesses operating in the Experience Economy say that innovative policies would help overcome the remaining challenges induced by the extended Covid lockdown that the industry endured.
Ibec, the group that represents Irish business, has said that removal of the final Covid restrictions over the past number of weeks has given the Experience Economy a significant boost, stimulating economic activity right across the supply chain in hospitality, retail, travel, food, drink, tourism and entertainment. However, the legacy of Covid restrictions continue to be felt with many struggling to source skilled staff. In addition, footfall in urban centres remains below pre-Covid levels, robbing towns of vibrancy and undermining efforts to revitalise these spaces following the lockdowns of 2020 and 2021. The industry holds that while the easing of restrictions has been welcomed, targeted interventions would overcome the remaining challenges and further catalyse recovery.
The Experience Economy is the linchpin of the domestic business model, making Ireland a great place to live, work and invest. Across the island of Ireland, the Experience Economy employed around 420,000 people directly or indirectly prior to the crisis - that is one in five people.
Before the pandemic, it comprised of €4.5 billion in wages, salaries and employment taxes every year. Up until 2020, spending in the Experience Economy accounted for more than one euro in every three euro spent by a household in Ireland. This compares to the one euro in every four euro in the EU as a whole. €1 billion spent by the Experience Economy every year on purchases of goods and services, including over €1 billion in purchases from domestic food and drink suppliers. Overseas visitors spent €5.6 billion in Ireland in 2019, with Irish domestic tourism accounting for a further €2.1 billion. In 2019, the St Patrick’s Festival, was alone worth €73 million to the Irish economy.
Ibec Director of Membership and Sectors, Sharon Higgins said: “It is fantastic that after two challenging years, communities and businesses across Ireland are now able to safely host in-person gatherings and events. This is a testament to the hard work and sacrifices endured by the Irish public in adhering to the public health guidelines.
“However, for those organisations in the Experience Economy who bore the brunt of the Covid restrictions, the legacy of these are still being felt. Many continue to struggle to source skilled staff while footfall in urban centres remain below pre-Covid levels, robbing towns of vibrancy.
“As the economic headwinds continue to change rapidly, the industry is set to face further periods of great uncertainty amidst rising costs of doing business. It is imperative for the long-term prosperity of the livelihoods of those in the industry that the Government proactively explores innovative policies to support those still experiencing the legacy of Covid restrictions.”
Amongst the key asks that the industry is calling on Government for:
- Extend the 9% VAT rate for hospitality into 2023, to protect demand in the sector against growing economic uncertainty
- Introduce public realm and events supports to help support the vibrancy of city centres as places to work, live and visit
- Ensure adequate resourcing of the visa permit system to overcome delays in processing
- Keep a watching brief on labour market supports in the event of any future change in the public health outlook
- Develop significant funding for the adoption of technology in the sector, to improve efficiency and help companies keep up with consumer trends.
The Experience Economy comprises of businesses and a workforce which operate across multiple sectors in Ireland as well as encompassing organisations in the arts, cultural, sporting, and heritage sectors. Across its domain are hospitality, retail, travel, food, drink, tourism, entertainment, events and activity combining together to deliver transformative experiences to visitors.