A fragile recovery in the tourism sector is threatened by rising costs of as much as 88 per cent in energy and 18 per cent in food and beverages, hotel and guest house owners have warned.
They also called on the Government to “use every tool in the box” to tackle insurance costs which they claim are rising 20 per cent year on year.
At the opening of their first conference in two years, individual members of the Irish Hotels Federation (IHF) expressed alarm at rising costs and called for the special 9 per cent tourism VAT rate to be retained.
IHF president Elaina Fitzgerald Kane said the Government must also do “everything within its power” to minimise the impact of tourism inflation. She said the first step would be to scrap the proposed increase in tourism VAT rate planned for September.
“Having only just weathered the storm of Covid-19, hoteliers and guest house operators are now facing into a gale of spiralling operational costs which are putting an unbearable strain on their businesses. Our sector – which is at the heart of communities throughout the country supporting over 270,000 livelihoods pre-pandemic – is being placed under real pressure by price hikes across all areas of operation.”
Calling for reform of the Personal Injuries Assessment Board the hoteliers said the Government must take action to tackle spiralling costs, including tackling “excessive” legal fees.
Renewing insurance
The IHF said 35 per cent of hotels reported difficulties renewing insurance due to increasing costs and lower levels of coverage for liability.
Ms Fitzgerald Kane said that while some reform measures have been introduced in recent years, they have not delivered the premium reductions intended.
The IHF is “calling for the Government to expedite legislative reform of the Occupiers Liability Act, to overhaul the Personal Injuries Assessment Board, and to accelerate the Department of Justice economic review on addressing excessive legal fees”, she said.
“Tangible reform continues to move at a glacial pace. Excessive premiums are continuing to hurt many businesses. This level of cost escalation is simply not sustainable.”
