The Irish Business and Employers Confederation (Ibec) have released its latest pulse survey on this economic sector, showing that 29% of companies operating there are less confident about their business than they were six months ago, added to by more than one in four having less confidence about the overall state of the economy.
According to Ibec, 300,000 people work in Ireland’s experience economy, which contributes €4 billion to the national economy. The sector encompasses hospitality, retail, travel, food, drink, tourism, entertainment, technology, events and organisations in the arts, cultural, sporting and heritage sectors.
Consumers spend roughly €1 in every €3 on experiences, compared to €1 in every €4 in other European Union countries. The survey also revealed that eight in 10 businesses cite the cost of labour, in addition to 73% identifying increased overhead costs as the two greatest risks to businesses within the experience economy ecosystem.
Businesses also highlight government regulation/compliance and cybersecurity as major business risks. The survey targeted nationwide consumer-facing businesses, operating in the restaurant, bar, accommodation and retail sectors as well as the wider supply chain including food and drink.
Up to 40% of respondents were from front-of-house business while 60% came from the wider supply base. “With the school midterm break ongoing, many of us, with our families, will be enjoying Ireland’s vibrant experience economy,” said Sharon Higgins, Executive Director of Membership and Sectors at Ibec.
“Unfortunately, many of the businesses at the heart of this sector remain vulnerable. While cost pressures persist, significant progress has been made through initiatives such as the enhanced ‘SME Test,’ the new Better Regulation Initiative, and pauses in Statutory Sick Leave increases — all reflecting Ibec’s advocacy efforts.”
However, additional relief is still essential, as we approach an election campaign and the formation of the next government. “It is important that the next Government have a clear direction on how we continue to support vulnerable businesses and ensure that new policies do not inadvertently drive up future costs.
“As a business community, we will engage with policymakers to highlight ways to maximise current efforts — such as ensuring that the enhanced SME Test and guidelines are rigorously applied by all government departments to measures impacting SMEs directly or indirectly.” They will also highlight additional measures, such as a PRSI rebate and how they could help offset labour costs for any struggling business.
The top three risks identified in the survey are inflation and impact on competitiveness (99%), increased overhead costs (98%), and cost of labour (97%). Up to a quarter of businesses are more confident about their business compared to six months ago, while 29% are less confident, with over half of these in the accommodation, visitor attraction and restaurant/bars sector.
The survey also found that 87% of businesses agree that sustainability is a priority, and plan to implement sustainability initiatives in the next one to two years.
Most businesses plan to invest in training over the next year, with internal and external training being the preferred forms of professional development. Companies are also investing in apprenticeships and internships.