Costs damaging the tourism sector: IHF

The cost of doing business in Ireland is the single biggest threat facing the success of the accommodation sector.

Overheads, rates, taxes and other price areas that the sector has no control over continue to spiral, according to new Irish Hotels Federation president, Dick Bourke.

Bourke stated that while the sector was trying to be competitive by focusing on the areas where there is flexibility to reduce costs, he called on the Government to cap price rises on essential services which it controls.

The new IHF president also called on the Government to bring what he termed Ireland’s exorbitant Value Added Tax rate with that of competing European Union destinations.

Bourke pointed to the 3% decrease in accommodation prices according to data from the Central Statistics Office and stated that no other service industry has recorded a drop instead of an increase in recent times.

“In the past year local authority charges, including water charges, have seen an increase of between 5-30%, electricity 5.7% and gas some 6.4% while postage charges increased by 13%," Bourke said today.

"These levels of increases combined with high VAT and excessive excise duties are the real drivers of the difficulties in competitiveness and the high costs for business operators,” Mr Bourke said.

“Tourism generates €5.2bn in revenue, with €2.3bn of this revenue finding its way into the Government’s coffers. This is a sector the Government should nurture ," he added.

The IHF president expressed members' concern that there is no accountability with respect to rates and charges increases and fears that possible future increases would further erode the industry’s competitiveness.

Bourke was speaking at the IHF's annual conference in Killarney today.