Hotel owners are facing “very turbulent times”, which will require the Government to do a U-turn and keep the Vat hospitality rate at 9%, the Irish Hotels Federation (IHF) has warned.
The business group said the global economic downturn means that forward bookings from Britain and continental Europe are running below 2019 levels at a time when hotel firms face significant cost increases.
The Vat hospitality rate, which in March is due to return to 13.5%, is much higher than comparable rates in Malta and the Netherlands, the IHF has reiterated.
“We are now heading into very turbulent times economically with growing uncertainty in our overseas markets,” said IHF president Denyse Campbell.
“This comes at a time when escalating business costs are eroding confidence among hoteliers,” she said.
“The economic outlook for the sector is now looking significantly less certain with pent-up demand quickly unwinding, overseas markets entering economic downturn and consumer confidence reaching decade-lows across key overseas markets,” according to IHF survey.
Meanwhile, consumer sentiment has fallen this month, probably because of the layoffs by some tech giants, but business sentiment has risen, and firms expect to invest more next year, according to the latest Bank of Ireland economic survey conducted for the EU.
The global economy “is a headwind for exporting sectors including ICT and the news of layoffs in some high- profile tech companies may have unsettled households this month”, said Bank of Ireland group chief economist Loretta O’Sullivan.
Separately, Tánaiste Leo Varadkar said the Government has given new powers to Local Enterprise Offices (LEOs) to provide advisory grants to help micro and small firms to access new export markets.
“This extension of the LEO mandate will fill a gap in state supports for those businesses with greater than 10 employees,” said Mr Varadkar. “Working closely with Enterprise Ireland, it will allow the LEOs to provide grants to help firms to have the ambition to export.”