Tourism firms lash out as Budget offered no relief on VAT hike

BY EMMA CONNOLLY 

LEADING figures in West Cork’s hospitality sector have hit out at the Government’s decision not to reverse the controversial VAT hike which they introduced in last year’s Budget and said the future looks uncertain for many.

They were reacting to the recent Budget which saw no change in the VAT rate.

General manager of Glengarriff’s Eccles Hotel, David Manning, said the hike from 9% to 13.5% is costing them an extra €112,000 in VAT on food and accommodation sales alone this year. 

‘On top of that we are guaranteed to operate at a loss of at least €90,000 for the year and it’s all down to VAT,’ he said. 

‘The government need to give us a break – it’s a difficult environment to be in, especially if you take into account the fact that visitors are down due to Brexit.’

Paul McDonald, chef and proprietor of Bastion Kinsale, which this week got its first Michelin Star, said the industry was facing into tough times. 

‘We absorbed the cost of the VAT hike this year and hoped it would be revoked in Tuesday’s Budget and were very disappointed by the failure to do so. Whether we can continue to absorb costs, we don’t know, as it’s hitting our bottom line. Our clientele is also heavily UK-based and we’ve seen a significant drop in numbers this year,’ he said. 

Neil Grant, chair of the Irish Hotels Federation (Cork branch), and manager of the Celtic Ross in Rosscarbery said the Budget was a ‘missed opportunity to rebalance the tax take from tourism, at a time when economic indicators provide significant warning of a change in outlook.’

‘We are now in a situation where we have a higher rate of tourism VAT than 27 European countries with which we compete. Add to this the challenges around Brexit and the 27% drop in the value of sterling in recent years and you have a perfect storm.’