Irish Hotels Federation Calls For VAT Increase To Be Scrapped

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The Irish Hotels Federation is appealing to the government to scrap the proposed increase in VAT for the sector.

The sector is facing escalating business costs, particularly in energy as it seeks to recover from the pandemic. 

The sector provided pre pandemic employment of over 270,000, 70% of which were outside of Dublin, says it is being placed under real pressure by price hikes across all areas of operation.

Hotels and guesthouses are reporting year-on-year increases of 88% in energy, 22% in water and 18% in food & beverage, as well as significant insurance increases.

The sector wants to government to retain a 9% VAT rate for the sector to provide some degree of international competitiveness.

The Rate is due to increase to 13.5%  in September which the IHF maintains would make Ireland a European outlier.

Of the 27 EU countries, the VAT rate on accommodation is lower than 9% in nine countries, is 9% in six countries and exceeds 13.5% in only one country which is Denmark.