Dunfanaghy hotelier Aisling Arnold has joined the call for the government to reinstate 9% VAT on food services in Budget 2025.
Arnold, who is the Chair of the Donegal Branch of the Irish Hotels Federation (IHF), was at the ‘Supporting Irish Hospitality’ event in Dublin this week highlighting worrying challenges for the hospitality sector.
Hospitality businesses the length and breadth of the country are struggling with rising costs and what they describe as inadequate government support.
A joint statement call the chief executives of the Irish Tourism Industry Confederation (ITIC), Restaurants Association of Ireland (RAI), Vintners Federation of Ireland (VFI), Irish Hotels Federation (IHF) and Licensed Vintners Association (LVA) said: “It is essential that last September’s VAT increase be revisited in the upcoming Budget given the severe impact it is having on hospitality businesses, many of which are facing enormous financial pressures.
“These businesses are now at a crossroads, struggling to deal with very tight margins and reduced profitability due to ever-increasing operating costs. To a large extent, this is being driven by the Government’s own economic policies including a series of employment-related cost increases coming into effect in close succession. The impact of these measures has been particularly acute for hospitality businesses given the labour-intensive nature of our industry.”
The next year spells further challenges, the leaders say: “Businesses throughout the sector are forecasting worrying cost increases over the next 12 months at levels significantly outpacing inflation within the broader economy. This is on the back of a period of unprecedented cost increases in recent years.”
The groups are calling on the government to act on their words of support for the sector: “While we have been repeatedly assured by the Government that it understands the extent of the challenges facing hospitality businesses, regrettably this has yet to translate into meaningful supports. It is now vital that the Government does everything possible to help put our sector and wider tourism industry on a more stable footing. At a minimum, this must include the reinstatement of the 9% VAT rate for food-related hospitality services.”
