Hoteliers in guarded welcome for Budget 2023 Business Supports

• Hoteliers broadly welcome energy supports under the Temporary Business Energy Support Scheme and seek amendment to criteria for significant employers
• Sector calls on Government to reconsider decision on 9% VAT rate

Hotels and Guesthouses across the country have broadly welcomed the energy supports for businesses announced in Budget 2023 but are seeking an amendment to criteria to ensure that significant tourism employers can receive appropriate supports in the face of skyrocketing business costs and a deteriorating economic environment. The sector has also said that they will continue to advocate for the retention of the 9% VAT rate beyond February 2023 as it is a critical measure to ensure the long-term sustainable growth of Ireland’s largest indigenous export industry.

Denyse Campbell, President of the Irish Hotels Federation, said that while elements of the Budget will help hoteliers, the sector feels that the Government have missed an opportunity to continue support for employment recovery and growth in tourism.

“The Temporary Business Energy Support Scheme (TBESS) is broadly welcome for hoteliers that have been hit by shocking energy price increases of over 400% in electricity and 300% in gas prices since 2019, in addition to a severe rise in day-to-day operational costs such as linen (29%), food (22%) and beverages (12%) in the last 12 months.* However, we are seeking an amendment to criteria for significant employers so that they can receive appropriate supports.”

Ms Campbell said that the tourism sector will be disappointed with the Government’s decision to increase the Tourism 9% VAT rate by 50% from March 1^st next year and that the Government has not fully recognised the importance of the tourism industry to every town and every county in Ireland.

“This increase will make Ireland’s tourism VAT rate the second highest in the European Union, and far above other European countries where tourism is a significant part of their economies, such as Portugal (6% Tourism VAT), Turkey (8%) and Malta (7%)**.

“Hoteliers and the tourism industry believe that 9% is the right VAT rate for long-term sustainable growth. Our industry has made great progress on restoring over 230,000 tourism jobs since the depths of the pandemic. We will continue to advocate for the retention of the 9% VAT rate beyond March 2023 and make the case for a labour-intensive industry that employs people in all parts of Ireland, including 70% outside Dublin,” Ms Campbell concluded.
 

Notes to Editor:
* Results based on a survey of owners and general managers of hotel and guesthouse businesses across the country with a total of 10,303 rooms and was conducted during August and September 2022.

** Source: Hotrec, EU Commission