Hospitality industry welcomes the reduction of VAT to 9%

'But for many, this small step will, unfortunately, come too late'

A VAT reduction was a key ask of the hotels and tourism bodies.

The hospitality industry has welcomed the cut in VAT rates for the sector from 13.5% to 9%.

The reduced rate comes into effect from November 1 to allow those businesses still operating to receive the benefit. A VAT reduction was a key ask of the hotels and tourism bodies.

Minister for Finance Paschal Donohoe said: "I have chosen to introduce this at the earliest possible moment to allow those businesses that are currently open to benefit. I am putting this reduced rate in place until December 2021 in order to provide significant additional support to businesses next year."

John Burke, managing director of The Armada Hotel in west Clare said the change was a small change in the right direction. 

"Hospitality venues across the country are under huge strain so the VAT cut is a welcomed change that will hopefully help businesses to bring in more customers and achieve at least median occupancy," he said.

However he said for many businesses in hospitality and tourism, the reduced VAT rate may have come too late.

John Burke, Managing Director of the Armada Hotel in west Clare.

“It is still unknown how many hospitality casualties there will be, but there will be many, and whilst this is a small step in the right direction, the industry still needs to hear more from Government on the long-term repair strategies and it’s hoped that this cut to VAT and the new payment scheme is just the start of their plans."

“I give credit to my peers in the industry who have not given up, especially those who have adapted their offerings consistently since March, be it by rolling-out takeaway or online services. The strength and resilience of business people and hospitality staff across Ireland, including our own here at the Hotel and other venues we operate, has been evident every single day throughout the last seven months," Mr Burke said.