Hoteliers say rise in Vat rate will cost jobs

Nearly 80% of hoteliers saw a boost in profits on the back of the good summer and an increase in footfall from the US, according to a survey by the Irish Hotels Federation.

However, the group said a withdrawal of supports, such as the 9% Vat rate that the currently industry enjoys, would result in an immediate loss of jobs.

Chief executive Tim Fenn urged that the Vat rate be retained. “The 9% tourism Vat rate initiative allowed tourism businesses to survive and create thousands of additional jobs at the first sign of an early and fragile recovery,” he said.

All but 1% of hoteliers said that paying a lower level of Vat had a positive impact on their business. However, Mr Noonan has strongly indicated that he will reverse the 9% rate.

Mr Fenn said a series of measures from the Government over the last two years had allowed Ireland to recover some of its edge when marketing tourism.

“The retention of this rate is vital to the stability of the already fragile economic recovery and any attempt to withdraw this support will only serve to reverse the current momentum,” he said.

According to the survey, 78% of hoteliers saw an increase in business during the summer compared to the same period last year. More than 60% said they had seen a jump in the number of US tourists, possibly driven by the Gathering.

British tourists have not been as attracted to these shores, with nearly a quarter of hoteliers reporting a drop in their numbers.

Mr Fenn said: “Continental Europe has also performed well and domestic market activity received a boost from the recent spell of good weather.

“However, Great Britain remains a major concern with little sign of recovering the drop in annual visitors since 2007,” he said, adding that something needs to be done to win back UK tourists.

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