Hoteliers furious over energy increases

THE moves by the ESB and Bord Gáis to raise energy charges from January have been slammed as “outrageous and blatantly insulting to Irish industry in its present economic state”, by the Irish Hotels Federation (IHF).

In seeking increases at a time of economic crisis both energy providers were out of step “with the reality of Ireland’s worsening economic conditions”. It added: “No increases will be acceptable to the IHF and its 1,000 members throughout the country who are seriously struggling to survive.”

The IHF has called on the Government to stop any electricity or gas price increases and to show some clear leadership in support of the industry in such challenging times.

Speaking on the eve of its submission to the Open Forum on Electricity and Natural Gas Tariffs hosted by the Commission on Energy Regulation (CER), the IHF said such unjustifiable hikes would see increases of 25.6% and 23.4% being granted for electricity and gas, respectively.

Fuel increases are already damaging the sector threatening the “the financial viability of hoteliers and guesthouses throughout the country” the IHF said.

The hospitality sector spends approximately €150 million on energy, representing more than 10% of operating costs of most hotels and guesthouses on an annual basis.

The IHF added that current price setting mechanism through the CER can not work and was inappropriate in the today’s economic conditions. “The ESB and Bord Gáis can not be allowed to function as if their costs and revenues are insulated from Irish economic reality,” it said.

Intervention by the state was urgently required to prevent the two energy monopolies from gaining systematic increases which have “absolute disregard for the economic circumstances of the country”.

The IHF said that all businesses and individuals were struggling to survive and the state has a responsibility to show leadership and assist in the creation of conditions to support industry and generate an economic recovery.

IHF president Matthew Ryan said it was “madness that these monopolies can simply be allowed to carry on functioning as if the current economic conditions do not exist and have no impact on their models for price increases”.

Tourism accounted for about 4% of Ireland’s gross national product last year while the hospitality industry accounts for 250,000 full-time, part-time and seasonal jobs.

The sector delivered €5 billion in foreign exchange earnings in 2007 compared with €2.1 billion in 1995.