Weak Euro Hurting Northern Ireland's Tourism
Published on Mar 16 2015 11:16 AM in General Industry
Northern Irish hospitality businesses will struggle to attract tourists from the eurozone, as the currency continues to drop against a strengthening sterling.
The unfortunate combination of the drifting values of the two currencies means that hotels, restaurants and pubs in Northern Ireland face a difficult time ahead, the Belfast Telegraph reports.
The euro is currently worth £0.71, the lowest it has slipped to since 2007. This has created a big disadvantage for businesses in Northern Ireland over their competitors in the south, as the exchange rate makes Northern Ireland an unattractive location for tourists from the eurozone.
In total, 65 per cent of tourists to Belfast are from the Republic, that number jumps to 80 per cent outside of the capital. With such dependency on the Republic of Ireland as a market, there are genuine fears that the industry could be in trouble as a result.
"There are big challenges, attracting the Republic of Ireland market is the bread and butter for the tourism industry," said Colin Neill, chief executive of Pubs of Ulster. "The exchange rate compounds the disadvantage (the higher VAT rate) we have."
Previously, a weak pound during a recession had given Northern Irish companies an advantage, as some saw record sales during a period when the two currencies were almost at parity. That trend has reversed now and the hospitality is preparing to feel the effects immediately.
Reports earlier in the year have shown how border hotels in places such as Donegal and Louth are "booming" thanks to the favourable rates.
Quantitative easing by the European Central Bank along with other economical factors have seen the euro fall to a seven-year low against the pound.