Government support disappoints Cork hoteliers

A PACKAGE of Government measures announced on Wednesday to support small- and medium-sized businesses was “disappointing” for hotels and other establishments in the hospitality sector that are dependent on food services, the Cork-based president of the Irish Hotels Federation has said.

Michael Magner, the owner of the Vienna Woods Hotel, said the measures, which included an increase in the PRSI threshold to match the hike in the minimum wage introduced in January, fell ‘far short’ of what was required to support small- and medium-sized regional hotels that were heavily dependent on food services.

“The bottom line is that these measures fail to address the enormous underlying challenges facing our sector, which is an important part of the wider tourism industry,” said the hotelier.

“The measures will have a minimal impact for many hotels that are struggling with unprecedented cost increases.

“This includes many regional hotels that are heavily reliant on food services and are dealing with very tight margins and reduced profitability in what is a very labour-intensive sector.”

He said the realignment of PRSI rates would “only offset a very small percentage of the enormous cost increases” that hotels and guesthouses were experiencing, and he called for a restructuring of employers’ PRSI, which he said was “essential for the sector”.

Another measure announced by Finance Minister Michael McGrath was a grant to reduce or entirely eliminate the local authority rates but, according to Mr Magner, many businesses that needed this support were excluded from availing of the grant because their rates bill was greater than €30,000 per year.

“The average 25-bedroom hotel, for example, pays rates above the €30,000 threshold and is therefore disqualified, while other businesses with much higher levels of turnover and profit are included.

“It just makes no sense when these are the very businesses that the Government should be supporting.”

He also referred to the decision to leave the Vat rate at 13.5%, where it had been restored to late last year after being at 9% during the pandemic, and said it had “eroded competitiveness”.