Belfast Telegraph

Republic of Irelamd's top hotel group fears tourism VAT hike in budget

By John Mulligan

The boss of Ireland's largest hotel group has blasted a report criticising the Republic's special 9% Vat rate for the tourism sector.

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But Pat McCann, chief executive of Dalata, which operates four hotels in Northern Ireland, insisted he has not given up hope that the rate will be retained in next month's budget in the Republic.

However, a return to a higher rate in the Republic would be cheered here, where tourism businesses are required to charge Vat at the standard 20% rate. Calls for a lower rate from the UK Treasury have not been successful.

A July report from the Department of Finance in Dublin said the 9% Vat rate introduced in 2011 was now a "significant deadweight" on the economy and that reverting to a 13.5% rate would not damage the tourism industry.

It said the reduced rate had cost the Republic's Exchequer €3.2bn between 2011 and 2018. The Irish Congress of Trade Unions has also said it was time to move back to the 13.5% rate.

But the tourism sector has credited the 9% Vat rate with having helped to create tens of thousands of jobs.

Dalata operates three Maldron hotels here - in Belfast city centre, Londonderry and at Belfast International Airport. It also has a Clayton Hotel in Belfast.

Mr McCann claimed yesterday that the Irish Department of Finance report is "so imbalanced".

"It never mentions anywhere what has actually happened as a result of the Vat reduction," he said.

He added that for 2018, the Vat take from the 9% rate is "heading towards €1.1bn".

Mr McCann, speaking yesterday as Dalata reported strong first-half results, said that it should not be a proxy for how the wider Irish hotel sector is performing.

The group warned that if the rate reverts to 13.5%, the move would cut its annual revenue figure by about 2%.

Dalata said that its revenue in the first half of the year rose 10.6% to €180.6m.

The company announced it has agreed to buy a new four-star 276-room hotel in Manchester, which will operate as a Maldron.

Last week Dalata also announced that it had agreed a deal to pay €100m for a new hotel in London.

Belfast Telegraph