Monaghan hoteliers are "deeply concerned" at the prospect of a 400 million euro VAT increase. The increase is currently under consideration by the Government at a time when consumers, both at home and abroad, are under significant financial pressure in the midst of a cost-of-living crisis.
Following a recent meeting between hoteliers and the wider tourism industry with Ministers Michael McGrath and Paschal Donohoe, IHF Mourne/Boyne/Lake Branch Spokesperson Tony Walker said he is "urging the Government" to retain tourism VAT rate at its current rate.
The prospects for 2023 are looking very different to last year, he noted. Unlike in 2022, there is no longer any significant pent-up demand or displaced business carried over from during the pandemic. Instead, he believes the sector is now facing significant economic uncertainty and very worrying headwinds over the coming 12 months given the slowdown in the global economy.
He continued; "“If implemented, the proposed 13.5% rate would mean we would have the third highest tourism VAT rate in all of Europe. This affects everything from the price of a cup of coffee, to the price of a meal out, a stay in a hotel and the cost of a wedding. A massive concern for us is the impact that this would have on people’s spending decisions. The reality is that people are much less likely to spend money on discretionary items such as holidays and breaks away at times of financial stress. Our industry is particularly vulnerable and will be first to take the hit.”
Mr Walker stated that, as Ireland’s largest indigenous employer, this is very worrying for Irish tourism – particularly for regions throughout the country that critically depend on tourism to support livelihoods and the local economy.
"We are grappling with an ongoing cost-of-living crisis, exceptionally high inflation, soaring interest rates and very poor consumer confidence across all markets," he warned. "This is at a time when our industry is facing escalating business costs with little room to manoeuvre.
"The focus of the Government should be on bedding down the recovery over the next 12 months – doing everything possible to safeguard livelihoods and the long-term prospects for our industry. Now is not the time to put tourism recovery at risk by increasing VAT."
