Parknasilla profits hit by VAT hike

THE boss of luxury south Kerry hotel and resort Parknasilla has blamed a sharp fall in profits on the outgoing Government’s decision to increase VAT for the tourism and hospitality sector.

The sharp 50-per-cent VAT increase to 13.5pc on the hospitality industry last year contributed to revenues declining by five per cent at the world-famous hotel located on a scenic site overlooking Kenmare bay, close to Sneem.

That is according to the managing director of the hotel, Tony Daly, who said last week that the VAT increase “has had a negative impact on business”.

Mr Daly said the hotel did not pass on the VAT hike to customers “and our revenues for 2019 have taken a five-percent decrease as a result”.

“Many smaller businesses such as restaurants have closed primarily due to this VAT hike that was ill-conceived by the Minister of Finance,” he said.

“The cost of doing business increased across the board in 2019, impacting on operational profit. UK business has decreased due to a weak Sterling exchange rate,” Mr Daly said in comments on new accounts for Parknasilla, which showed that the hotel’s Silork Ltd recorded an operating profit of €1m in 2018.

This followed revenues increasing by six per cent, to €8.5m from €8m.

Mr Daly said that 2018 had been “a bumper year for tourism throughout Ireland.”

“Our (Parknasilla’s) revenues increased significantly during the full season. International business was consistent, and domestic business grew, aided by a beautiful summer.”

Silork recorded a pre-tax loss of €631,481, and Mr Daly said this was due to a €1.6m unrealised cost that does not impact on the operation.

According to the report, staff costs at Parknasilla increased to €2.9 million in 2018 as the numbers employed at the popular hotel and resort rose to 94 from 90.