Increasing tourism VAT is 'the last thing we should be doing' - Walker
Hoteliers urge government to heed poll findings
Hoteliers are urging the government to take heed of the latest opinion polls on the 9% tourism VAT rate.
The government is poised to once more apply a VAT rate of 13.5% to the tourism sector at the end of February.
Irish Hotels Federation (IHF) made its comments after the Business Post/Red C poll found that two-thirds of people (66%) believe the current rate for hotels and restaurants should be extended. Less than a quarter of people (23%) against.
Hoteliers flag the potential increase is a "major worry" for the sector which claims to support over 250,000 livelihoods throughout the country.
In total 81% of hoteliers are reportedly very concerned about the impact a VAT increase would have on their businesses. They cite the challenging headwinds facing the sector in the coming 12 months due to low consumer confidence, caused by the the cost-of-living crisis, high levels of inflation and increases in mortgage interest rates.
“It is very worrying that the Government is contemplating an increase when many of our key tourism markets are experiencing a cost-of-living-crisis. Increasing consumer taxes such as tourism VAT is the last thing we should be doing at this point," stressed Tony Walker IHF Mourne, Boyne & Lakes Representative.
“People in Ireland and across our overseas markets are already being squeezed by exceptionally high levels of inflation and other pressures on their finances, which means there is a real risk that many will pull back from discretionary spending on holidays and breaks away.
“We are urging the Government to retain the tourism VAT at its current rate. Any increase would have a significant inflationary impact and would damage our tourism competitiveness, with Irish consumers and overseas visitors having to pay the third highest tourism VAT rate in all of Europe.
"The focus of the Government should be on safeguarding tourism livelihoods and securing the long-term sustainable recovery of our industry. Now is not the time to put tourism recovery at risk by increasing VAT.”