Rates and VAT ‘killing hotel industry’

LOCAL authority rates and a “crippling” VAT regime are killing the hotel industry and need to be overhauled urgently, the Irish Hotels Federation said yesterday.

Speaking at the federation’s annual conference at Cork’s Silver Springs hotel, IHF president Richard Bourke said the current rates system was unfair and hit hotels much harder than other businesses.

“The current system of rates involves a fixed charge, incurred annually, that is based on notional property values and bears no relationship to the size or scale of the business or its ability to pay,” said Mr Bourke. “For example, a small accountancy or legal firm could generate over €1 million in fees from a small office, whereas a 40-bedroom hotel, located in a much larger building, might generate a similar income but yet it will pay substantially more in rates.”