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Hoteliers call for VAT cut as summer occupancy levels plunge

The Irish Hotels Federation warned the sector needs urgent help.

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Ireland’s tourism sector has been badly affected (PA)

Ireland’s tourism sector has been badly affected (PA)

Ireland’s tourism sector has been badly affected (PA)

Hoteliers have called for tourism VAT to be slashed to boost the hospitality sector after they reported occupancy levels of between 23% and 26% for the summer months.

According to figures from the Irish Hotels Federation (IHF), this is based on confirmed bookings, compared to an average of 90% for the same period last year.

The IHF said that occupancy for September, which is traditionally a popular time for US visitors, stands at 22%.

The British government on Wednesday announced plans that tourism and hospitality VAT will be cut from 20% to 5% for the next six months.

The move will benefit accommodation in hotels, B&Bs, campsites and caravan sites.

Time and again, tourism has proven itself as a hugely successful engine for economic growth.Elaina Fitzgerald Kane

IHF president Elaina Fitzgerald Kane said the substantial drop in occupancy levels highlighted the “unprecedented challenges” facing the sector and called for an immediate intervention to support tourism businesses.

“When we look across the water to the UK, we see the decisive action taken yesterday by UK Government in their Plan for Jobs,” she said.

“Given how closely our economies are intertwined a similar cut here is necessary. The UK is not only our biggest market for overseas tourists, it is also our biggest competitor.”

The IHF boss also called for urgent clarity on the guidelines for gatherings in light of the decision by the Northern Ireland Executive to allow the capacity for indoor gatherings including weddings to be determined by the size of the venue from July 10.

She added: ““Currently capacity here is limited to 100 people regardless of the size of the venue. We are calling on the Government to allow hotels that can safely host larger weddings to do so based on the size and scale of the venues, rather than imposing a general limit on how many people can gather at any venue, regardless of safe capacity,” she added.

Almost 90% of hotels across the country are expected to be open again by the middle of the month.

Ms Fitzgerald Kane said that the tourism industry supports 270,000 livelihoods.

“Time and again, tourism has proven itself as a hugely successful engine for economic growth, particularly in regional Ireland. In the aftermath of the last recession, tourism created 90,000 new jobs.

“Last year alone it generated over 9 billion euro in revenue.

“We are committed to working closely with the Government and with Minister Catherine Martin to safeguard tourism, Ireland’s largest indigenous employer, so that it can play a key role again and be a significant lever in the country’s economic recovery.

“However, this requires specific sectoral supports now in relation to liquidity and competitiveness.”

The IHF have called for five measures to be implemented including:

– The continuation of the Wage Subsidy Scheme until the impact of Covid-19 restrictions has fully abated and inclusion of seasonal employees.

– The size of gatherings should be linked to venue capacity as opposed to an arbitrary cap on numbers.

– A reduction in tourism VAT to 5% until December 2021 followed by a permanent restoration to 9% to assist recovery and secure a viable and sustainable future for tourism.

– Liquidity measures tailored to the specific challenges facing tourism to help businesses survive and restart.

– Local Authority rates and charges – the three-month waiver period should be extended for tourism businesses to coincide with business interruption due to Covid-19 and for a minimum of 12 months.

PA