Kerry hoteliers’ budget anger
HOTELS and guesthouses in Kerry have criticised the Government’s decision not to reverse the tourism VAT hike, which came into effect following last year’s budget.
Bernadette Randles, Chair of the Irisih Hotel Federation’s Kerry branch said the increase in VAT from nine per cent to 13.5 per cent has seriously undermined Irish tourism’s international competitiveness and the ability of tourism enterprises such as hotels to re-invest in their business and local economy.
“Budget 2020 is heralded as a Budget for Brexit. Despite the serious challenges facing tourism, Government has failed to recognise the importance of competitiveness and its role in the ever increase in the cost of doing business in Ireland. This is a missed opportunity to rebalance the tax take from tourism at a time when economic indicators provide significant warning of a change in outlook,” said Ms Randles.
“Ireland is already a very high-cost economy by international standards which adds to the challenges of an indigenous export industry and this is being made worse by the higher 13.5% VAT. We are now in a situation where we have a higher rate of tourism VAT than 27 European countries with which we compete. Add to this the challenges around Brexit and the 27% drop in the value of Sterling in recent years and you have a perfect storm,” Mr Randles said.
Ms Randles said that the impact is being felt on the ground by tourism businesses with 57 per cent of hotels having seen a fall in overall business levels this year according to IHF research.
The UK market is very challenging with 78 per cent of hotels having seen a fall-off in business from Great Britain and 60 per cent reporting a decrease in business from Northern Ireland.
Meanwhile some 64 per cent have reported that the drop in the value of Sterling has had a negative impact on business levels while 73 per cent say they are now re-examining investment plans and taking a more cautious approach for next year as a result.