July stimulus 'a missed opportunity',  say Cork hoteliers

Maintaining the VAT rate at its current level makes Ireland 'untenable from a competitiveness point of view', says Cork IHF chairman.
July stimulus 'a missed opportunity',  say Cork hoteliers
Fergal Harte, general manager of The Kingsley Hotel and chairman of the Cork branch of the Irish Hotels Federation. Picture: Eddie O'Hare

Cork hoteliers said they have serious concerns about the stimulus package announced by the Government, saying it does not go far enough to support tourism and jobs.

Fergal Harte, chairman of the Cork branch of the Irish Hotels Federation (IHF), criticised the lack of a VAT-rate cut for the sector. 

"This is a missed opportunity given how highly effective the previous reduced VAT rate was in promoting increased employment," he said.

"We now have a higher rate of VAT than 30 other European countries with which we compete. This is untenable from a competitiveness point of view and puts us at a serious disadvantage, particularly when you consider our nearest neighbours — Northern Ireland and Britain — now have a tourism VAT rate of 5%. 

"We will be engaging further with the Government on this critical issue as part of the October National Economic Plan.”

The IHF said 270,000 are employed by the industry — including the 25,300 jobs supported locally by tourism in Cork.

“While measures to stimulate consumer demand are welcome, we have serious doubts about how effective the ‘Stay and Spend’ tax credit scheme will be in stimulating consumer demand.

It seems overly cumbersome and convoluted, and we are urgently seeking further clarification from the Government on how the measures will operate.

Mr Harte acknowledged the measures announced to address liquidity and investment as vital for the survival of many tourism businesses. “However, these do not go far enough to secure the long-term stability of the industry," he said.

Commenting on the employment wage support scheme, he said: “The new wage support scheme is welcome and will help hospitality businesses to keep their teams together until tourism and the overseas market recovers.

"The inclusion of seasonal workers and new hires is especially important."

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