'The cost of doing business is getting out of control': Cork hoteliers call for urgent change

Cork hoteliers are calling for urgent change to safeguard tourism and hospitality ahead of the general election.

Representatives from hotels and guesthouses across Cork called on all political parties and candidates this week to commit to policy measures aimed at staving off the commercial crisis facing the wider tourism and hospitality industry.

Chair of the Cork branch of the Irish Hotels Federation (IHF) Ciarán Fitzgerald, who is also the owner of the Blue Haven Hotel in Kinsale, says that an urgent change in direction is now required to ensure the future viability of the sector.

“Our message to all political parties and candidates in the general election is that tourism and hospitality should not be taken for granted,” said Mr Fitzgerald.

“Much more needs to be done to safeguard and prioritise our industry.

“Tourism and hospitality must be at the heart of the next Government’s economic policy supported by targeted measures to ensure our industry lives up to its full potential as a major engine for growth and economic prosperity.” 

 Key measures outlined by the IHF include the reinstatement of the 9% VAT rate for hospitality food businesses, the introduction of a Local Authority commercial rates waiver and an employers’ PRSI rebate.

“A key priority for our sector is the need to tackle the cost of doing business, which is getting out of control and posing an enormous risk to the sector,” added Mr Fitzgerald.

“There has been an alarming deterioration in the commercial model of hospitality food services in particular as a result of the increased VAT rate coupled with a raft of Government-imposed large cost increases.

“Businesses are now at a cross-roads requiring immediate action by the next Government.” 

 Speaking to The Echo, Aaron Mansworth, managing director of Trigon Hotels said that he supports the urgent call issued by members of the IHF.

COST OF DOING BUSINESS 'HAS SPIRALLED'

“We’ve said all along that the 9% VAT rate was the correct rate,” said Mr Mansworth.

“The cost of doing business has just absolutely spiraled – and when you see the cost just continuing to go up and up, you’re going to see more closures.

“We need some framework, some measures, that are going to help businesses to survive – all of our fixed costs have increased across the board, and it’s not just about minimum wage increases.

“I don’t think there’s a silver bullet in terms of one thing that will fix it, it’s a vicious circle, but if we could put a couple of these measures together, it would give people a fighting chance.” 

 Further, Michael Magner, national president of the IHF and owner of Cork’s Vienna Woods hotel said: “What we’ve seen since 2022 is a runaway rate of inflation, and businesses in Ireland are really suffering.

“Our industry is not looking for handouts from government, we want to stand on our own two feet, we want to have a viable and sustainable industry, but when you have a situation whereby the cost of doing business in Ireland is far outpacing the cost or the level of inflation – it just does not make sense.

“Hospitality and tourism is the largest indigenous industry in Ireland, so frameworks have to be put in place and those frameworks need to be permanent measures, like the restoration of the VAT, like looking at the level of commercial rates that businesses pay, and then the employers PRSI.” 

The full IHF manifesto outlining desired measures can be found here: here.