As tourism faces difficult times, we should accommodate Ukrainian refugees in hotels

Battered by Covid-19, rising costs, staff shortages and now war Ukraineis it time to think the unthinkable and shrink the tourism sector?

Covid has completely thrashed tourism, with revenue falling by an estimated 85 per cent in 2020.

Last year was only marginally less dire, with the Irish Tourism Industry Association estimating total revenue lost to Covid-19 over the two years at a whopping €12.2 billion.

This year should be a year of recovery, with ITIC Chief Executive Eoghan O’Mara Walsh forecasting last December that overseas visitor numbers would recover in 2022 to 60 per cent of 2019 levels.

Vladimir Putin apparently had other ideas. The Russian invasion of Ukraine has pushed up oil prices. Aviation fuel is now 80 percent more expensive than at the beginning of the year and almost two and a half times more expensive than 12 months ago.

These higher fuel prices will inevitably lead to more expensive tickets. Will this deter overseas travelers hoping to fly to Ireland this year?

inflation was charged by the war. When O’Grady Walsh made his predictions for 2022 last December, he outlined three possible scenarios; positive, baseline and negative; The baseline scenario predicts a recovery to 60 percent of foreign visitor numbers in 2019 this year.

“We are still working on the baseline scenario, but are much more cautious than we were a few weeks ago. We’re still sticking with a 60 percent increase in visitor numbers.”

Tourism is extraordinarily vulnerable to economic and political turmoil. It doesn’t take much for American tourists watching a European war on their television screens, even if it’s being fought on the other side of the continent, to postpone their trip to Ireland.

But Irish tourism is resilient. Any sector that came through the Northern Troubles virtually unscathed is tough and will not be easily derailed by the war in Ukraine.

That is a good thing. Tourism is by far the largest Indigenous employer, with Fáilte Ireland estimating that the sector sustained 265,000 jobs before the pandemic, around one in ninth of all jobs. We welcomed 9.7 million overseas visitors in 2019. These visitors spent 5.6 billion euros and paid a further €1.75bn to Irish airlines to get here. Add to that the €2bn that domestic tourists spend and ITIC estimates that tourism has contributed to this 9.3 billion euros for the economy in 2019.

And yet, even before the outbreak of Covid-19, there were clear signs that tourism was feeling the effects. While overseas visitor numbers rose slightly in 2019, revenue fell 1 percent, the first such decline in eight years.

All of this begs the question: are there deeper problems facing the tourism sector?

While tourism supports an enormous number of jobs, most of these jobs are relatively low-paid. CSO figures show that at the end of 2019, 179,000 people were employed in lodging and catering, mainly in tourism – most of the remaining tourism jobs are transport and warehousing.

The average annual income in 2019 for the economy as a whole was just over 40,000 euros. The average earnings in accommodation and gastronomy, on the other hand, was just over 19,000 euros – The average earnings in transport and storage was €43,000.

In its defense, the tourism sector can point out that workers work fewer hours than most other sectors, 27.5 hours a week versus a national average of 32.4 hours.

However, workers in hospitality and hospitality not only work fewer hours than workers in other sectors, they are also paid far less for those hours, €13.42 versus a national average hourly rate of €23.88 in 2019. The national minimum wage for adults in 2019 it was €9.80.

It should come as no surprise that these workers, who were earning around €370 per week in 2019, found the PUP paying €350 per week to be so attractive.

We need to focus less on the absolute quantity of jobs and more on their quality. Is it really the best use of scarce labor when 11 percent of all workers are employed in a sector where average earnings are only slightly above minimum wage?

“You can’t just say why not move a few thousand workers in Killarney or Mayo to another sector. In many areas, tourism is the only show in town,” says O’Grady Walsh.

While Irish tourism isn’t going away anytime soon, the large Irish diaspora in Britain and North America will ensure a steady flow of foreign visitors no matter what Vladimir Putin does. Is it time to think the unthinkable and shrink the sector?

With Tanaiste Leo Varadkar 40,000 Ukrainian refugees are expected by the end of next month, perhaps some of the empty hotel rooms could be used to house them instead. As tourism faces difficult times, we should accommodate Ukrainian refugees in hotels

Fry Electronics Team

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