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The Irish Hotels Federation (IHF) has expressed “deep disappointment” with the lack of measures in Budget 2024 to address the soaring costs of doing business for tourism and hospitality, Ireland’s largest indigenous employer.
Denyse Campbell, IHF’s president, said that the failure to address government-controlled business costs was an enormous concern, particularly in relation to employers’ PRSI.
Campbell said: “We are now at a crossroads in terms of business costs for labour intensive industries, such as tourism and hospitality. A fundamental restructuring of employers’ PRSI is now essential for our sector.
“This is one area where Budget 2024 could have made a tangible difference by introducing a targeted rebate on employers’ PRSI over the next 36 months. The lack of any support in relation to PRSI is extremely disappointing and must be revisited urgently.”
The federation’s president also noted that Irish tourism and hospitality has experienced “unprecedented” increases in operating costs over the last 18 months.
With no let-up in sight, cost inputs are continuing to rise right across all areas of business for hotels and guesthouses at a time when they are also dealing with a significant rise in interest rates.
Regarding the implications of the recent increase in tourism VAT, the 13.5% rate will also have a negative impact on the sector.
In addition, IHF had sought a greater commitment from the government in relation to support for specific sustainability initiatives within the hotels sector and the wider tourism industry.
Campbell said: “We’re disappointed that the government has not committed to keeping the tourism VAT rate under review. We now have the third highest tourism VAT rate in all of Europe. Regional hospitality businesses outside the main tourism hotspots will be hardest hit, as will those businesses heavily reliant on food services, which are dealing with very tight margins and reduced profitability.
“It is regrettable that we have not seen more movement in relation to sustainability supports targeting tourism and hospitality. There is a real desire among hotels to embrace further sustainability measures in line with the government’s Climate Action Plan. We would like to have seen a funding commitment for a dedicated National Hotel Retrofitting Scheme.”
