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Hotels urged to pass on VAT cuts

The tourism and hospitality trades have been urged to pass on new VAT rate cuts to customers.

Leo Varadkar, Transport, Tourism and Sport Minister, said the initiative to get visitors and Irish consumers spending will only work if all businesses pass on the benefits.

But the minister accepted that no-one can be punished for refusing to cut their prices.

"This measure has the potential to significantly boost jobs in the tourism industry," the minister said.

"It's one of the single most important measures in the Government's Jobs Initiative. But it will only work if businesses pass on the benefits of the lower VAT rate to customers. That's why I am calling on tourism operators right across the country to act in the spirit of this measure, and pass on the VAT cut in full."

The 4.5% reduction - taking VAT on some services from 13.5% to 9% - affects restaurants, hotels and guesthouses, cinemas, theatres, newspapers, hairdressers and some sports facilities. It is estimated the cut will take one euro on average off menu prices.

Failte Ireland, which has written to thousands of restaurants and hotels urging them to pass on the savings, said the plan is to bring down costs, improve competitiveness and then create jobs.

Chief executive Shaun Quinn said: "Tourism has been handed a part to play here to contribute to this country's economic recovery and now is the time to step up to the plate.

"We in tourism have an opportunity over the next few months to offer improved value to our customers and to promote a message that Ireland is not only open for business but is also good value for money

"I would urge all tourism operators to make this initiative work - by doing so they will also be helping themselves towards making a positive case for a permanent VAT reduction."

Press Association

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