The hospitality sector has welcomed the decision to keep the special VAT rate at nine per cent, as announced by Finance Minister Michael Noonan in Budget 2016.
The Irish Hotel Federation said the decision to keep the rate down was "vital support for employment growth", as jobs in the sector have risen by 33,000 since its implementation.
Tim Fenn, chief executive of the IHF said that the budget "is very positive for the many thousands of tourism businesses which now support 205,000 jobs across the country – equivalent to 11 per cent of total employment.”
Fenn added that the special VAT rate, which was introduced in 2011, is "one of the most successful job creation initiatives in modern times."
Also welcoming the new was Fáilte Ireland, who said it has helped with the perception overseas that Ireland is a value-for-money destination.
Shaun Quinn, chief executive of Fáilte Ireland said tourism in Ireland is on the rise, and Ireland is competing with overseas destinations.
"The continuation of this measure will help sustain growth and deliver more jobs in the year ahead,” said Quinn.
Minister Noonan made the decision to retain the special rate but added a warning to the hotel industry against price-hiking, echoing Tourism Minister Paschal Donohoe's warning made in August.
