Escalating business costs are eroding confidence among Kerry hoteliers.
That’s according to chair of the Kerry branch of the Irish Hotels Federation (IHF) Bernadette Randles.
She was speaking as IHF analysis found that 94% of hoteliers are concerned about the economic outlook.
The IHF analyisis found a number of challenges are facing hotels and guesthouses, including spiralling business costs, reduced forward bookings compared to 2019 and the return of the 13.5% tourism VAT rate.
The IHF says despite an uplift in tourism during 2022 following the pandemic, overall hotel room occupancy rates are still significantly down on 2019 for the year to date.
Chair of the Kerry IHF branch, Bernadette Randles says the sector is heading into very turbulent times economically with growing uncertainty in the overseas markets.
She says energy costs are a particular worry and are now running at 10-12% of total revenue for the average hotel, up from just 4% of revenue in 2019; this means an increase of €380,000 in annual energy costs for an average 70-bedroom hotel.
Ms Randles says while the Temporary Business Energy Support Scheme introduced in Budget 2023 is welcome, the qualification criteria are far too restrictive for hotels, as these businesses are also seeing an increase across the cost of food suppliers (up 25% this year), beverages (up 16%), linen and laundry services (up 30%) and insurance costs (up 18%).
The Killarney-hotelier also hit out at the decision to increase the tourism VAT rate to 13.5% at the end of February; she saas this is the third highest tourism VAT rate in Europe.
She says we should be seeking to restore and grow tourism, and not undermine it with a VAT rate hike, particularly when business costs are skyrocketing, inflation is soaring and the global economy edges towards recession.