VAT cut welcome but ‘pity’ not introduced sooner, hotel manager says

An earlier cut to VAT for food services could have “saved a lot of businesses”, a hotel manager has said, while welcoming Budget moves on tourism marketing.

The Government announced a slashing of the VAT rate for a swathe of the hospitality sector on Tuesday, with the rate for food services coming down to 9% from 13.5%.

While this does not cover accommodation, hotels which also offer food services see it is as a helpful measure – although the measure will not kick in until July.

Eoin Jacob, general manager of the Clanard Court Hotel in Athy, Co Kildare, welcomed the move – but felt it should have “happened sooner”.

Mr Jacob said his overall reaction to the Budget was “positive”, but said some moves could have happened sooner and at a bigger scale.

Speaking to the PA news agency, he added: “We’re seeing too many businesses closing – and it seems like the straw that broke the camel’s back.

“If it happened sooner, it could have saved a lot of businesses.”

He added: “But it is great to get it all the same.”

Mr Jacob said hotels had seen their cost base rise, in large part due to a “massive” increase in food prices, rising energy costs and employment-related expenses.

He said that the Government’s approach over recent years risked Ireland becoming less competitive.

“It all adds up and makes Ireland less attractive.”

Mr Jacob said data for the Irish Hotels Federation saw that hotels across Ireland were seeing a significant drop in revenue from overseas customers.

Meanwhile, he said an “accommodation crisis” has made it difficult to attract the new and sought-after talent to find homes to live in within commuting distance of hotels.

He, therefore, welcomed the Government’s measures to drive housing delivery which included a cut for the VAT rate on new apartments.

Coming into the Budget, Mr Jacob believed the Government should increase investment in tourism marketing.

During the announcement on Tuesday, Public Expenditure Minister Jack Chambers said the Government recognises tourism as a “vital driver of regional development and employment”.

He said 232 million euro was being provided for the tourism services programme to “capture strategic opportunities” and enhance Ireland “on the world stage”.

Reacting to that measure, Mr Jacob said: “Anything that helps ‘Product Ireland’ is brilliant – but like a lot of areas, people would have liked to see more.”