Kerry hoteliers have given a cautious welcome to the Government’s COVID-19 business stimulus package but say the measures don’t go anywhere near far enough to help them meet the crisis they are facing.
Among the main area of concern for hotel operators is the Government’s failure to specifically address the tourism and hospitality VAT rate.
While the headline VAT rate has been cut by two per cent to 21 per cent, hoteliers are extremely disappointed that a more tailored approach was not taken to the sector’s difficulties and a decision made to deliver a reduction in tourism VAT.
While Kerry members of the Irish Hotels Federation welcomed the New Employment Wage Support Scheme, which they say will help keep teams together, they have also expressed serious doubts about the effectiveness of a ‘Stay and Spend’ tax-credit scheme.
Chair of the Kerry Branch of the Irish Hotels Federation Bernadette Randles said local hotel and B&B operators are very disappointed that the Government failed to deliver a reduction in tourism VAT.
“This is a missed opportunity given how highly effective the previous reduced VAT rate was in promoting increased employment. We now have a higher rate of VAT than 30 other European countries with which we compete. This is untenable from a competitiveness point of view and puts us at a serious disadvantage, particularly when considering our nearest neighbours Northern Ireland and Britain now have a tourism VAT rate of five per cent,” said Ms Randles.
Ms Randles said the IHF plans to lobby the Government on this critical issue ahead of the launch of part of the October National Economic Plan.
She also expressed doubts about the effectiveness of the ‘Stay and Spend’ credit scheme that will allow holidaymakers claim a tax credit or rebate of €125 on a €600 hotel or restaurant spend.
“While measures to stimulate consumer demand are welcome, we have serious doubts about how effective the ‘Stay and Spend’ tax credit scheme will be in stimulating consumer demand,” she said.
“It seems overly cumbersome and convoluted, and we are urgently seeking further clarification from the Government on how the measure will operate,” Ms Randles said.
Ms Randles acknowledged the measures announced to address liquidity and investment will be vital for the survival of many tourism businesses, but she feels they do not go far enough to secure the long-term stability of the industry as a whole.
While the Employment Wage Support Scheme is welcome, Ms Randles said further or increased measures are needed.
“The new wage support scheme is welcome and will help hospitality businesses to keep their teams together until tourism and the overseas market recovers. The inclusion of seasonal workers and new hires is especially important,” she said.
“Other measures such as the rates waiver and reopening grants could give businesses much needed breathing space as they work to stabilise their businesses for the future, and we look forward to seeing the details there. There is a concern that the rates waiver does not go far enough, and we hope that this is addressed as part of the National Economic Plan in line with what is being done in the UK,” she added.
“We also welcome the additional supports being put in place for training, which is hugely important as we build capability and our skills base for the future,” Ms Randles said.
“Outstanding challenges for our sector include the requirement for an urgent review of the Government’s current travel restrictions, which are putting tourism jobs further at risk. We are calling for the ‘green list’ to be extended in line with the approach taken by our European partners. This should be supported by a comprehensive testing regime for visitors from countries not on the list,” she added.
Ms Randles said many hotel and B&B operators are still unsure about the immediate future and called for greater clarity on the next steps in reopening the country.
“Clarity is required for the reopening of the remaining facilities in hotels and guest-houses including the size of indoor gatherings, which should be linked to the capacity of venues, ” said Ms Randles.
“Hotels and guest-houses have been open over three weeks and have demonstrated safe practice across all aspects of their businesses through the adoption of guidelines and training endorsed by the HSE, HSA, HPSC and the FSAI,” she said.