Hotels warn 'unsustainable' increase in water charges threatens survival of businesses

A 9.8% increase for non-domestic users will come into effect from October 1

Plans to increase water charges for hotels are "unsustainable" and threaten the survival of many businesses, industry representatives warn.   

Plans to increase water charges for hotels and businesses are "unsustainable" and threaten the survival of many, industry representatives warn.     

The Commission for Regulation of Utilities (CRU) announced plans on Tuesday to approve a 9.8% across-the-board increase in water charges for non-domestic and wastewater following a proposal from Uisce Éireann. The increases will come into effect from October 1. 

The Irish Hotels Federation voiced "serious concerns" over the regulator's decision and said the increase follows an average hike of 30% in water charges for hotels compared to this time last year.

“This is yet another example of the relentless increases in operating costs that are eroding Irish competitiveness and undermining the viability of businesses," said IHF president and owner of Cork's Vienna Woods Hotel, Michael Magner. "Over a two-year period, the average 70-bedroom hotel in Ireland will have seen an increase of over 40% in water tariffs. This is unsustainable given the exceptionally challenging environment in which hotels and other hospitality businesses are currently operating.” 

Mr Magnier said that as a major consumer of water services, the hospitality sector is disproportionately impacted by increases in water tariffs, which businesses are unable to absorb. "The cumulative impact of these and other cost increases now poses a serious threat to the viability of many businesses through our wider tourism and hospitality sector."

Cork Chamber representing the interests of almost 1,200 businesses employing over 130,000 people, voiced frustration at the decision. Earlier this year, the business representative group made a submission during a public consultation, calling on the CRU to favour the lowest proposed tariff rate increase of 1.7%.

“In the current context of global economic uncertainty, protecting and enhancing Ireland’s international competitiveness must be prioritised in all government decision-making. This week’s announcement of a 9.8% increase represents a further cost burden for business and will have an acute impact on SMEs, as well as many large indigenous and multinational businesses," said Chamber director of public and international affairs Cathal McSweeney. 

Uisce Éireann charges non-domestic customers for supplying water to their premises. "The charges customers pay are determined under Uisce Éireann’s Non-Domestic Tariff Framework," said the CRU. "The ministerial-approved Strategic Funding Plan 2025-2029 suggests that there is a need for €16.9bn in Uisce Éireann’s funding over the five-year period, to deliver Uisce Éireann’s capital programme and recover its operating costs to achieve critical outcomes for customers and communities."

Mr Magner said it is imperative that the Government tackles these increases head on and delivers targeted measures to enhance cost competitiveness and support business viability. 

 “We are particularly concerned about the potential for further annual increases through to 2029, including the ongoing transfer of unjustifiable costs arising from inefficiencies in the delivery of water services in Ireland. We are calling for a fairer funding model that supports the long-term sustainability of Irish water services, while maintaining cost competitiveness for SMEs.”