The Irish Hotels Federation (IHF) has called on the government to act swiftly to offset the impact that its policies are having on the operating costs of hospitality businesses.
Responding to a government report examining the cost increases for businesses arising from employment-related measures, IHF president Michael Magner stated that tourism and hospitality are now at a “crossroads”, with government-controlled costs having a “disproportionate impact” on businesses throughout the sector.
‘Very Disappointing’
“The government must take decisive action to support tourism and hospitality businesses, which are a vital part of our economy, supporting some 270,000 livelihoods,” said Magner.
“Specifically, we are calling for a fundamental restructuring of Employers’ PRSI for our sector, including a targeted rebate for businesses within the sector.
“The lack of any support to date in relation to PRSI is very disappointing, and this must now be prioritised, without delay.”
Tourism VAT
Magner further argued that hospitality businesses are also experiencing the direct impact of the government’s decision to increase tourism VAT, making Ireland an outlier, with the third-highest rate of VAT in Europe.
Referencing the report, Magner said that the increased 13.5% VAT rate is further adding to cost pressures for businesses operating in the sector.
‘Shocking Impact’
“The impact of the VAT increase has been most pronounced for rural and regional businesses and those that are heavily reliant on food and beverage sales, with very tight margins,” said Magner.
“This decision needs to be reviewed. At a minimum, there is now obviously a very strong case for the government to reconsider its blanket increase, given the shocking impact on food-related services within our industry.”
