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BUDGET: “Businesses will fold” after VAT rate on tourism increases

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By Sean Moriarty

Bernadette Randles, the chair of the Kerry Branch of the Irish Hoteliers Federation (IHF) has warned that business “will fold” as a result of this week’s budget.

Budget 2023, which was announced Tuesday afternoon by Minister for Finance Paschal Donohoe, and Minister for Public Expenditure and Reform Michael McGrath, confirmed that the VAT rate for service industries like hotels and guesthouses will increase from 9% to 13% on March 1.

This is on top of rising energy costs and the general increase in doing business in Ireland as a whole.

Ms Randles said the Government does not understand the hospitality industry.

"The tourism sector will be disappointed with the Government’s decision to increase the Tourism 9% VAT rate by 50% from March 1 next year and that the Government has not fully recognised the importance of the tourism industry to every town and every county in Ireland," an IHF statement said.

Busy hotels in Killarney and other tourist towns lead to busy town centres as guests visit other hospitality and non-related businesses.

Difficulties in the hotel industry affect everyone in Kerry; in pre-COVID times the sector supported 15,700 jobs and generated €592 million in local tourism revenues annually.

“You are going to see businesses folding,” Ms Randles told the Killarney Advertiser.

“It is hard to see how the smaller person will survive.”

Plans to add 11 new bedrooms to the Dromhall Hotel could be put on hold following this week’s budget.

“This was already on hold for three years but now I am going to seriously look at it and where it goes.”

Nationally, the industry employs 230,000 people, a drop from 330,000 in pre-pandemic times but these latest cost increases will further delay the industry’s full recovery.

Denyse Campbell, President of the Irish Hotels Federation, said that while elements of the Budget will help hoteliers, the sector feels that the Government have missed an opportunity to continue support for employment recovery and growth in tourism.

Ireland’s tourism VAT rate is the second highest in the European Union, and far above other European countries where tourism is a significant part of their economies, such as Portugal (6% Tourism VAT), Turkey (8%) and Malta (7%).

“Hoteliers and the tourism industry believe that 9% is the right VAT rate for long-term sustainable growth. Our industry has made great progress on restoring over 230,000 tourism jobs since the depths of the pandemic. We will continue to advocate for the retention of the 9% VAT rate beyond March 2023 and make the case for a labour-intensive industry that employs people in all parts of Ireland, including 70% outside Dublin,” said Campbell.

Hotels and other businesses will benefit from the Temporary Business Energy Support Scheme aimed to offset the cost of rising energy bills.

Ms Randles said that will only go so far.

“One Kerry member has seen an increase from €121,000 in his annual ESB bill to €375,000, that's over €1,000 a day to keep the door open.”

She was also critical of the national media who consistently ran price gouging stories throughout the summer.

“You never hear of them reporting on the good side of hotels, the people that stay and have great experiences, the GAA clubs we support, the charities we give to, free meetings rooms if community groups want them.”

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Rathmore students look to the future

Students in Scoil Phobail Sliabh Luachra, Rathmore looked to the future as they explored third level opportunities. The teens took part in a number of activities to mark College Awareness […]

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Students in Scoil Phobail Sliabh Luachra, Rathmore looked to the future as they explored third level opportunities.

The teens took part in a number of activities to mark College Awareness Week which was held in schools and other education settings nationwide last week.

The focus throughout the week in their school was to highlight the wide range of options open to them when they leave school and to realise that there are pathways to suit all types of learners.

Students from First to Sixth Year took part in activities to get them thinking about their future plans.

First and Second year students completed a module on ‘My Pathways’ and Third Years had an introductory talk on options after school.

Transition Year students worked on a display on all the options and pathways available after school which will remain up permanently.

Senior Cycle students attended the Careers Fair in Munster Technological University (MTU) where they got a chance to meet universities, colleges of Further Education, agricultural colleges, apprenticeship and more education and training providers from around the country including past sudent Aidan O’Mahony at the stand with An Garda Síochána.

Leaving Cert and LCA students had a really informative talk in school on Further Education and apprenticeships from Ella O’Donoghue, Admissions Officer of Kerry College.

The week finished with a talk for Senior Cycle students on Business and Law options in UCC by Ian Wallace.

“A highlight of the week was the involvement of past students, who sent us video clips on their career stories so far and shared tips with students,” Niamh Dwyer, Guidance Counsellor at the school, said.

“It was fabulous to see how well our former students have done and it was really important for our current students to see the diversity of pathways they have taken including apprenticeships, Further Education courses, university, travel, setting up businesses and returning to education as mature students. We are really grateful to the past students who reconnected with us for this week, their input was inspiring and invaluable.”

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Students have education and fun London trip

Leaving Certificate students from St Brigid’s returned home Saturday night after a hectic four-day tour to London. The 87 girls took a tour of London on their first day in the city […]

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Leaving Certificate students from St Brigid’s returned home Saturday night after a hectic four-day tour to London.

The 87 girls took a tour of London on their first day in the city after landing. They visited some of the famous locations on the journey, such as Big Ben, the Houses of Parliament, Westminster Abbey, and Trafalgar Square. They enjoyed a night at the Lyceum Theatre in the West End watching ‘The Lion King’.

The girls went to The Natural History Museum on day two, which has one of the world’s greatest collections of historical artefacts. They took their time looking around the massive cathedral-like structure’s sculptures and frescoes. Four coloured zones that focus on topics including the environment, evolution, the planet, and wildlife make up the museum’s divisions. They then took pleasure in a trip to the fascinating Science Museum. It was the ideal location for someone with an inquisitive mind, full of amazing things to do and explore.

The Victoria and Albert Museum was the next stop on the itinerary. The V&A’s collection of art spans 5,000 years, from prehistoric periods to the modern era. The Mouse Trap, an Agatha Christie play, was the entertainment for this evening at the St Martin’s Lane Theatre. The play’s 70th anniversary was this week.

On day three, the girls boarded a capsule for a 30-minute spin of the London Eye and marvelled at the breath-taking sights of London. After that, they went to the Royal Observatory Greenwich’s Planetarium and Astronomy Centre, where they experienced an amazing adventure through space. They went to the Prime Meridian in Greenwich, planting one foot on the eastern and the other on the western hemisphere of our planet.

The girls ended their evening at what was a highlight for many at Winter Wonderland in Hyde Park.

On the final day before flying home, the girls went to Oxford Street to do a spot of shopping.

“A great trip was had by all where many memories were made,” said Sheree Murphy, one of the teachers who travelled with them on the trip.

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