Hotels call for 9% VAT to stay
Comments made by the tourism minister this week about extending the sector’s 9% VAT rate have been welcome by a hotel group in Cork.
Cork hoteliers involved with the Irish Hotels Federation (IHF) welcomed the remarks by Minister for Tourism Catherine Martin TD on Monday that she will continue to seek a further extension of the 9% VAT rate for the tourism and hospitality sector in Ireland.
The tourism VAT rate, which is due to expire at the end of next month, is currently under review by the cabinet.
An IHF statement said: “In light of the growing economic challenges facing the sector, local hoteliers are urging the Government to retain the existing 9% rate to safeguard tourism livelihoods and secure the long-term, sustainable development of Irish tourism.”
The industry is at a “critical juncture”, the IHF said, adding that consumer confidence is reaching “decade lows across key markets as it grapples with a cost-of-living crisis, record levels of inflation, interest rate hikes, skyrocketing business costs and a global economy that is edging towards recession.”
The statement continued: “Tourism businesses are collectively Ireland’s largest indigenous employer. Prior to the pandemic, our industry supported over 270,000 livelihoods including some 27,000 jobs throughout Cork city and county, generating €895m in tourism revenues annually for the local economy.
“With a full recovery in tourism now likely to be delayed until 2026, an increase in the VAT rate to 13.5% is the last thing that should be contemplated given its inflationary impact and the damage it would cause to Ireland’s tourism competitiveness. This would result in Irish consumers and overseas visitors having to pay the third highest tourism VAT rate in all of Europe.”
Tourism strategy
Minister Martin’s comments came as Tourism Ireland launched details of its new marketing strategy and plans to promote the island of Ireland overseas in 2023.
Tourism Ireland said it aims to rebuild revenue from overseas holidaymakers to pre-pandemic levels, by attracting value-adding tourists - visitors who stay longer, spend more in the regions - and by focusing on markets that deliver the greatest revenue.
Tourism Minister Catherine Martin said: “I want to commend Tourism Ireland for the comprehensive marketing strategy they have put in place for 2023. In particular, I welcome the focus on embedding sustainability across all its activities, the increased consideration of the environmental impacts of tourism and the focus on increasing representation of holidaymaker diversity.”
She added: “International travel to Ireland rebounded strongly in 2022, but the sector continues to face significant challenges, therefore it is vital that we continue to invest in overseas marketing and the additional funding of €15 million that I secured in Budget 2023 will enable Tourism Ireland to significantly ramp up its promotion of Ireland as world-class tourism experience in key markets.”
“I also want to take this opportunity to acknowledge Niall Gibbons’ contribution to Tourism Ireland. Niall, who will step down as CEO in April, played a key role in the development of the organisation through its formative years and has overseen its emergence as a world leader in tourism marketing. The record levels of growth in tourist numbers, and associated revenues over the past decade, is testament to his hard work and leadership. I wish to thank him for over 20 years of outstanding service to Irish tourism and I wish him every success in the future,” said the Green Party TD.