IHF President Michael Magner has called for action on government-controlled costs, including employment-related measures and VAT increases, are having on the operating costs of hospitality businesses, particularly hotels.
It follows a government report indicated hospitality firms face 19pc cost hikes by 2026 due to rise in living wage, after which Simon Coveney said he would outline further supports for businesses impacted most by recent legislative changes.
Magner called for decisive action from the government to support the tourism and hospitality sector, which employs around 270,000 people, including a fundamental restructuring of Employers’ PRSI and a targeted rebate for businesses within the industry.
He says the decision to increase tourism VAT was another factor adding to the cost pressures for hospitality businesses, especially those in rural and regional areas and those heavily reliant on food and beverage sales with narrow margins.
Hotels and other hospitality businesses have faced unprecedented cost increases over the past two years, with rising input costs, interest rates, and early forecasts indicating further operating cost increases of over 8pc ahead, surpassing inflation levels in the wider economy.
Mr Magnier said: “The impact of the VAT increase has been most pronounced for rural and regional businesses and those that are heavily reliant on food and beverage sales with very tight margins. This decision needs to be reviewed. At a minimum, there is now obviously a very strong case for the Government to reconsider its blanket increase given the shocking impact on food-related services within our industry.”
