TRAVEL journalist Nell McShane Wulfhart earlier this year wrote a column in the New York Times entitled 'What to Do in Belfast'. Her opening line was: "Avoided, underrated or just plain forgotten, Belfast is a city that's been fighting a bad reputation for half a century. A visit today, however, is an eye-opening experience in the best possible way".
Wulfhart goes on to describe the vibrant restaurant scene, award-winning architecture and notes that "the friendliness of the people is what's most appealing in this small and very walkable city, from smiling servers to talkative bartenders to helpful strangers on the street". There is plenty going for Belfast in terms of its tourism offering, and rural regions right across Northern Ireland have plenty to offer too.
I attended a couple of business events last week organised by Cavanagh Kelly which lured me out of Belfast and over to Fermanagh and Cookstown. City folk tend to forget about some of the eye-catching scenery that is a mere hour and a half car journey from Belfast. Rural communities in Northern Ireland have so much to offer when it comes to local tourism and in 2015 they hope to capture more and more business as the economy recovers.
The importance of the tourism and hospitality industry should not be under-estimated. This is a sector that incorporates a range of activities covering hotels, restaurants, take-away food, and catering and event management.
In Northern Ireland this industry employs roughly 45,000 people and directly it contributes around £720 million to the local economy. And when we consider the indirect impact of this industry on other sectors such as food and beverage manufacturers, marketing, advertising and agriculture, the overall contribution is considerably larger.
People also forget that bringing in tourism income from outside Northern Ireland is equivalent to exporting our goods and services and therefore tourism helps to rebalance our economy away from domestic-dominated growth.
To its credit, the Department of Enterprise Trade and Investment has invested heavily in Northern Ireland's tourism infrastructure over the past number of years with the aim of catapulting this sector into a £1 billion industry by 2020 (almost doubling its size). Bidding and winning applications for international events to be hosted in Northern Ireland has increased significantly too and this year the launch of the Tall Ships and the Irish Open will maintain great momentum for this sector.
Further support has come from the introduction this year of the British-Irish Visa Scheme which will make it easier for Chinese and Indian visitors to come to Northern Ireland through the Republic, as well as through Great Britain. This scheme allows tourist visitors to include a visit to Northern Ireland on their itinerary without the traditional visa complications. Furthermore, by abolishing air passenger duty on long-haul flights, Northern Ireland has been able to retain good aviation connections with the United States - one of our more popular sources of tourism and business visitors. Visit Belfast, Tourism NI, Tourism Ireland and even our local golf heroes have all played a key role in the international marketing of NI.
But there are also challenges for the sector. The strong pound this year is putting plenty of pressure on the local tourism industry, pushing prices up for RoI and other European tourists by a full 10 per cent since last summer. In addition, the Republic's low rate of VAT for tourism-related goods and services has left Northern Ireland at a distinct disadvantage compared to their competitors south of the border.
There are two key things that will support tourism and hospitality in the years ahead and help us to deliver that £1bn target by 2020. Firstly, all-island collaboration will remain a key priority and needs to be stepped up. If we are to make the most of this new British-Irish visa scheme we need to grow cooperation and develop much greater collaboration around cross-border tourism initiatives. Rural communities, particularly those in border areas, need to be exploring all-island cooperation for cultural events, tourism marketing and building multiple tourism connections. Northern Ireland's new district councils need to be establishing greater cross-border links and helping local companies tap into EU cross-border funding such as COSME. This EU programme with a budget of €2.3bn offers support for small businesses seeking to expand their markets or find a cross-border business partner. COSME specifically has funding opportunities for the tourism sector.
The political pressure on Westminster should also be stepped up. Having a great tourism offering is one thing, but when it costs significantly more than the tourism offering in the Republic of Ireland we are left at a distinct disadvantage. Pubs of Ulster have been leading a campaign for three years now, calling on the government to reduce VAT rates for businesses in the tourism sector in Northern Ireland. They point out that VAT reductions for the tourism sector have been introduced in the majority of EU countries to promote tourism, and to protect and nurture jobs. This is now a UK-wide campaign and if successful will have no impact on the Northern Ireland block grant.
Without doubt Northern Ireland is losing out because of VAT. Back in 2012 the assembly secured a motion which called for a reduction in tourism-related VAT to help us compete on a level playing field with the Republic. The motion called for a reduction in VAT for the hospitality sector from 13 per cent to 9 per cent. It received full cross-party support and was passed unanimously. Yet in Westminster
the proposal has encountered a bottleneck and there has been no progression on this front despite HM Treasury's own economic model showing that a VAT cut would have massive benefits to the entire UK economy - bringing in £4bn in new revenue into the UK and would save consumers an average £50 per head on visitor accommodation and attractions.
With a messy UK election result expected in May, now's the time for local politicians to beef up their demands with Westminster if there is to be any post-election pact. There would be little point is holding some political power unless we were to use it to the advantage of the local economy. Our politicians need to wield all the political muscle that they currently possess to push Westminster for a lower VAT rate on the tourism industry which will create local jobs, bring in foreign revenues and allow for much greater cross-border collaboration with our RoI tourism partners.
* Angela McGowan is chief economist at Danske Bank. Follow her on Twitter: @angela_mcgowan
* Next week: Richard Ramsey