Hotels say they are still in recovery mode

Bernadette Randles: Unforeseen challenges have arisen

Hotel and guesthouse owners in Kerry have met with local political representatives to discuss the challenges facing the tourism sector as 2023 approaches.

While there has been a welcome upturn in tourism this year, businesses remain in recovery mode, having survived the worst economic shock in recent memory and they are now confronting skyrocketing energy costs and an expected global economic downturn in key markets next year.

Bernadette Randles, chairperson of the Kerry of the Irish Hotels Federation, outlined to Kerry representatives the crucial importance that everything possible is done to protect and secure tourism livelihoods and support the long-term sustainable development of our wider tourism industry.

“Irish tourism businesses are collectively the largest indigenous employer in the country. Here in Kerry, tourism accounts for 16,600 jobs and €592 million of revenue annually,” she said.

It is vital that local TDs and senators understand the value and importance of tourism to local communities but also the enormous impact multiple factors are having on these businesses.

How the VAT rates compare

Mr Randles said over recent months, unforeseen challenges have arisen, including the continued war in Ukraine, the increasing risk of a global downturn and escalating business costs and ongoing energy crisis which, in particular, is causing real concern for hotels and guesthouses in Kerry.

“Nationally we are seeing hotels reporting increases of upwards of 300 per cent in energy bills compared with 2019 levels. This is unsustainable and will inevitably lead to difficulties in relation to future viability of some businesses in the tourism sector,” the Kerry IHF chairperson pointed out.

Hoteliers also discussed with local political representatives the importance of the nine per cent tourism VAT rate and how this is the right rate for the long-term sustainable development of Ireland’s largest indigenous industry, which in 2019 employed 270,000 people and returned over €2 billion to the exchequer in direct tourism-related taxes.

The hoteliers argue that the current nine per cent rate is the right rate for Irish tourism in a European context. Increasing the tourism VAT rate by half to 13.5% in March 2023 would make Ireland’s tourism VAT rate the third highest in Europe, far above other European countries where they take tourism seriously like Portugal (6%), Malta (7%) Netherlands (9%).

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