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Will he or won't he? Minister for Finance Paschal Donohoe has the authority to decide whether or not to raise tourism's VAT rate. File photograph: PAThe hotel sector is relearning the value of an old truism: short-term gain can lead to long-term pain. Alarm bells are ringing in the sector that the Government in next week’s budget will confirm that tourism’s VAT rate is to rise from 9 per cent back up to 13.5 per cent.
Certainly, the frothy prices charged by hoteliers in Dublin, Galway and other hot spots have given the Government a ready-made excuse to allow the rate to revert to 13.5 per cent at the end of February, as it always planned before the recent energy price crisis turned hotels from cash cows into money pits.
The Irish Hotels Federation says demand for hotel rooms is now “cooling rapidly”. This is a sharp turnaround from the summer, when average occupancy in many areas topped 90 per cent.Hotels are suddenly being squeezed from two sides. They are huge users of electricity and gas for heating rooms and vast public areas, cooking and also for powering saunas and heating swimming pools. Bills are now a multiple of what they were before the pandemic.
They will absolutely
Biz You betcha they will pay the price. They’ve killed the golden goose
Biz Believing this is a recipe for disaster!