HOTELS and guesthouses in Kerry have slated the government’s decision not to reverse the tourism VAT hike, which came into force in last year’s budget, when the rate increased from nine per cent to 13.5 per cent.
Bernadette Randles, chair of the IHF Kerry branch, said it has seriously undermined tourism’s competitiveness and the ability of hotels to re-invest in their business and local economy.
“Despite the serious challenges facing tourism, the 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,” she said.
Ms Randles said tourism in Kerry supports 15,700 jobs and contributes in the region of €592 million to the local economy annually so is disappointing that the government has failed to recognise the exceptional challenges now confronting tourism businesses.
“A rate of nine per cent VAT is the appropriate level for Ireland and would put us mid-range in a European context. This is what the government should be looking at to ensure long-term sustainable growth of our industry,” the Killarney hotelier added.
Ms Randles said 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.
The UK market, in particular, 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.
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