Hotels face VAT and Brexit trial

HOTELS and guesthouses in Kerry have voiced serious concerns about tourism performance this year and the challenges facing the sector, including Brexit and increasing business costs.

According to the latest national industry survey from the Irish Hotels Federation (IHF), 57 per cent of hotels saw a fall in overall business levels compared to this time last year.

The Chair of the Kerry branch of the IHF Bernadette Randles said the accommodation sector in Kerry is facing into a challenging period.

“Irish tourism has been one of the great success stories of the economy in recent years. Here in Kerry it supports 15,700 jobs and contributes some €592m to the local economy annually,” said Ms Randles.

“However, we are now at a cross-roads and facing a number of pressing challenges including serious risks associated with Brexit, increasingly high costs of doing business in Ireland and ongoing difficulties in attracting visitors to the regions and extending the short tourism season.

To help address these challenges, we are calling for additional supports from Government to assist tourism businesses, including a restoration of the nine per cent VAT rate,” Ms Randles said.

“Brexit is particularly challenging in light of our heavy reliance on visitors from the UK, which is even more pronounced for regional tourism businesses. A ‘no-deal’ outcome would cause enormous difficulties for the hotel sector, creating the prospect of a drop of over 10 per cent in tourism revenues from UK visitors and a decline in Irish consumer sentiment, which would have a knock-on effect on domestic tourism activity,” she said.

“Furthermore, we continue to face increasingly high costs of doing business which have been compounded by the Government’s decision to increase tourism VAT. As a result, Ireland now has a higher rate of VAT on tourism accommodation than 27 countries in Europe with which we compete, making us less attractive as a destination,” Ms Randles said.

Stock image A drop in visitor numbers coupled with the rise in VAT and Brexit are prompting concerns among many of Kerry’s hotel and guesthouse operators.