Hoteliers express VAT concerns amid decrease in British tourists

The Irish Hotels Federation (IHF) has again expressed concerns that a potential increase in tourism VAT would undermine the recovery in Irish tourism.

The federation was responding to figures from Fáilte Ireland this morning which show substantial decreases in visitors from key overseas markets in 2022 compared to 2019.

Passenger arrivals for last year from Britain and the US were down 21% and 20% respectively when compared to 2019.

Denyse Campbell, IHF President, said that with these figures, the government cannot justify increasing Ireland’s tourism VAT rate, making it the third highest in Europe.

“A tourism VAT rate of 13.5% would undermine our competitiveness and result in people paying an additional €400m more in taxes each year on everything from the price of a cup of coffee, to the price of a meal out, a stay in a hotel and the cost of a wedding,” she said.

“That’s a 50% increase in consumer taxes for Irish tourism services during a cost-of-living crisis when both Irish consumers and overseas visitors are under enormous financial pressure.”

Ms Campbell said hoteliers and tourism operators are particularly concerned about the UK market for 2023 and beyond, with the country facing a bleak economic outlook with inflation hitting a four-decade high.

“Our main focus should be on securing the recovery over the next 12 months – doing everything we can to safeguard livelihoods and the long-term prospects for our industry.

“We should do nothing to put the recovery in tourism at risk and are urging the Government to retain the 9% VAT rate.”