‘Follow UK lead on VAT cut’ say hotel bosses
HOTELS are barely a quarter full nationwide and need the same VAT break just provided to hoteliers in the UK to compete, according to the Irish Hotels Federation.
The UK on Wednesday cut its VAT rate for hospitality firms – including hotels, restaurants and pubs – from 20pc to 5pc until next January. This has undercut Ireland’s 13.5pc VAT rate on hospitality firms, most of which have reopened since June 29.
The Irish federation’s president, Elaina Fitzgerald Kane, said its 1,000 hotel and guesthouse members normally have 90pc of their rooms booked through August. But bookings are running only 23pc for this month and 26pc next month.
She said Ireland must match the UK’s VAT cut.
“The slashing of their VAT rate from 20pc to 5pc is a clear sign of their commitment to support the recovery of their tourism and hospitality industry,” she said. “Given how closely our economies are intertwined, a similar cut here is necessary. The UK is not only our biggest market for overseas tourists, it is also our biggest competitor.”
She said the State also should follow the UK’s lead on the maximum size of indoor gatherings. As of today, the Northern Ireland Executive is allowing indoor venues, including hotels hosting wedding parties, to set caps based on the size of the venue. This potentially would allow much larger wedding parties in the biggest churches and hotels.
“Currently capacity here is limited to 100 people regardless of the size of the venue. We are calling on the Government to allow hotels that can safely host larger weddings to do so based on the size and scale of the venues, rather than imposing a general limit on how many people can gather at any venue, regardless of safe capacity,” said Ms Fitzgerald Kane, who is director of the Fitzgeralds Woodlands House Hotel and Spa in Adare, Co Limerick.
The hospitality sector long has campaigned for VAT to be returned to 9pc, the discounted rate that applied from 2011 to 2018. More recently, publicans have repeatedly called for the Government to slash VAT to 5pc to aid the ravaged cash flow of firms reopening after four-month shutdowns.
Ms Fitzgerald Kane said Ireland should reduce VAT on hospitality firms to 5pc until December 2021.
Hoteliers north of the Border have celebrated the VAT cut – and some say they are reducing their rates and menu prices accordingly.
“We have long complained that our VAT rate at 20pc was inequitable compared to the south,” said Howard Hastings, managing director of Hastings Hotels.
“The decision to reduce it to 5pc until January means that we can now offer even more incentives to people to travel to the north for their holidays. We will have new lower accommodation rates on our website and all our food menus will be repriced to reflect the VAT changes,” said Mr Hastings, whose firm owns seven hotels across Northern Ireland, including the five-star
Culloden Estate and Spa, the Slieve Donard Resort and Spa, and three Belfast hotels: the Europa, Stormont and Grand Central.
While hotels here broadly report weak bookings, those with scenic views are reporting stronger business for dinners and drinks.
The Marker Hotel in Dublin’s Docklands, which has reopened this week, says 70pc of its tables on its Rooftop Bar & Terrace are already booked for this month.