Hotels seek 30% cut in local rates

The Irish Hotels Federation (IHF) is looking for a 30% cut in local authority rates for its members and has called on the Government to cut water and energy costs.

The IHF claims that the average local authority rate works out at €1,500 per bedroom, regardless of occupancy rate.

“The hotels sector stabilised in 2013, largely as a result of the relentless work of hotels and guesthouses to slash costs where there was any level of flexibility. We have brought costs down by a massive 24% since 2008. Hotels are now much leaner, having restructured their business models throughout the downturn, improved their products and lowered prices.

“There is nowhere else for hoteliers to go to cut costs and increase our competitiveness. Government determined costs on the other hand have not changed to adapt to the new economic reality,” said IHF president Michael Vaughan.

“It’s now over a decade since the 2001 Valuation Act came into force and yet over two thirds of hotels are still waiting to have their rates reviewed by the Commissioner of Valuation. Those that have been revised saw reductions of over 30%.

“The time for waiting is now over. The Government needs to step up to the plate and take immediate action. We’re calling on Minister Phil Hogan to instruct the remaining local authorities to introduce the same reduction as an interim measure while we wait for revised valuations to be completed across the rest of the country.”

Mr Vaughan said the IHF had “deep concerns” about the duplication costs involved in setting up Irish Water, which is likely to add to the overall cost base. Moreover, the decision by the Commission on Energy Regulation to impose additional levies on electricity customers when businesses are already facing a challenging economic environment was also a major cause of concern to its members, he added.

The annual IHF two-day conference starts today.

Overall the hotel sector saw a 1% increase in national occupancy rates last year on the back of increased overseas visits. However, the IHF said there was a ‘three speed market’ in operation. Dublin city is doing very well; Cork, Galway and Killarney are doing “fairly well”; and, places such as the midlands, Shannon and the northwest continue to struggle.