Northern Ireland Hotels Federation (NIHF) CEO Janice Gault said:
“Friday is the 1st April. It is commonly known as April Fool’s Day, a date when pranks are staged and much is made of practical jokes. For the hotel industry, it will mark the return to the standard 20% VAT rate; if only this was a prank staged by the Treasury instead of a considerable blow to an industry committed to recovery!”
MS Gault added “Since March 2020, the hotel sector in Northern Ireland has been afforded considerable support by way of grants, a rates holiday and increased marketing subvention. Survival has been paramount, and depending on your definition, has been realised. There has been success with a strong staycation market, a good demand for hotel experiences but we are not back to pre-pandemic trading levels.”
The NIHF CEO continued: “There has been massive disappointment about the increase in the VAT rate. A reduced 5% VAT rate was introduced from the 15th of July 2020 rising to 12.5% on 1st October 2021. Unfortunately, businesses did not get the full benefit of the reduction due to prolonged closures and stringent restrictions. Fast forward to 1st April 2022, the reality of a return to the 20% rate has been met with dismay. This is a cost that will have to be passed on to the customer. Food, utilities and staffing costs are increasing at a phenomenal rate. Guests are the lifeblood of a hotel business.”
Ms Gault emphasised that “there is a fine balancing act between covering costs, making profit and continuing to give guests an affordable and valued experience. Hotels need to make profit in order to invest, grow and evolve. It’s a balancing act which is proving increasingly challenging to walk. Raising the price of any service is never easy and may test guest loyalty. Adding to the hotel experience can increase costs but helps attract and retain customers. However, a punitive VAT rise, with no recognition of the challenges faced and commitment shown, is a careless action ill thought through with repercussions that may hamper restoration.”
She closed with a statement on the industry; “Interest remains high. Pent up demand is still evident and staycations remain prevalent. Transport infrastructure is slowly returning and there is much to be positive about. However, the stoicism shown by hoteliers will go a long way to ensure survival and indeed underpin success in the future”.
