Eoghan O'Mara Walsh: Hospitality Vat reduction may alleviate some labour cost pressures

With a mixed demand picture and significant cost pressures the immediate outlook for Irish tourism is challenged

Research from Deloitte Ireland shows a 142% increase in hospitality closures in the first quarter of the year alone compared to last year.

It’s that time of year again when every week there seems to be a different interest group — NGO, civic or business — submitting its budget proposals to the Government for consideration. The Irish tourism industry is no different and a detailed submission went in earlier this month arguing for the restoration of the 9% Vat rate for the sector and a reversal of the investment cuts announced last year.

Of course, Minister for Finance Jack Chambers can talk about competing interests and finite resources, but the latter argument has a somewhat diminished credibility after the Government’s own Summer Economic Statement signalled a budget package to include tax cuts and spending increases amounting to a whopping €8.3bn.