Budget 2025: A – V – E – A

AVEA’s Budget 2025 submission is focussed on four key pillars:

Acceleration of Business Costs: Our members operate with a high fixed cost base, due to the nature of delivering high quality experiences in unique settings, year-round.

This model is extremely vulnerable to volatility in costs, and in 2024 our greatest challenges are:

  • The move to a National Living Wage will result in an increase of 32% to our wage bill 2024-26 (source: Fáilte Ireland, 2024)
  • Pension auto-enrolment, increase in paid sick leave, and increased employer PRSI further exacerbate cost pressures.
  • Insurance premiums are continuing to rise, with a lack of competition and intransigence of current providers.
  • Energy, food, and building/maintenance costs increasing at rates outpacing inflation

Unsustainable increases of business costs are our single greatest threat. The pace of increase must be slowed.

VAT: 13.5% VAT rate pushes prices up. The 9% VAT rate on tourism services expired on 28th February 2023. AVEA and the wider tourism and hospitality sector are in complete alignment that 9% is the correct rate. The higher VAT rate damages competitive pricing and destination attractiveness. Ireland’s VAT rate of 13.5% is an outlier in the EU, making us comparatively a more expensive destination for tourists. Returning VAT to 9% will benefit visitors and support our value proposition.

Economic Value of Tourism to be Optimised: 100,000 jobs were lost, then regained, in the tourism and hospitality sectors 2020-2024. Tourism earnings could grow by 50 per cent by 2030, employing up to 350,000 workers and delivering €3.5bn to the Exchequer (source: ITIC). Visitor attractions are key economic drivers, sustaining rural economies, and driving the purchase of local goods and services. Fáilte Ireland and Tourism Ireland budgets to be increased; and an all-Government approach to rural tourism prioritised.

Access Enhancement Point-to-Point: The passenger cap at Dublin Airport is a profound threat, which will stagnate and possibly shrink our connectivity. Maintaining international connectivity is critical to Irish tourism’s continued success. We ask for support for collaborative marketing to develop access into regional airports; prompt rollout of the promised ZEVI (EV charging) scheme at visitor destinations; and continued rollout of sustainable Local Link bus services into visitor destinations, in particular the ‘last kilometres’ to bring visitors to the heartlands. Access is a critical enabler on both an international and regional level.