The Irish Hotels Federation (IHF) has slammed as “half-baked” and “short-sighted” measures targeting the domestic and inbound tourism and hospitality sector in Budget 2025.
The IHF expressed its “deep disappointment” with Budget 2025, saying the Government has failed to respond in any meaningful way to the commercial crisis facing hospitality food-led businesses.
It also said the failure to return the hospitality VAT rate to 9% is short-sighted and extremely concerning.
IHF President Michael Magner said: “The Budget does next to nothing to address the enormous challenges confronting our sector while at the same time imposing further costs on thousands of hospitality businesses.”
“The decision not to reduce the hospitality VAT rate is short-sighted and extremely concerning given the stark commercial environment that foodservice businesses are operating under throughout the country.”
“These businesses are facing a perfect storm as they grapple with rising costs, the impact of the 13.5% VAT rate and very tight margins. It is becoming increasingly clear that Government policies are now fundamentally at odds with the long-term interests of our sector and wider tourism industry.”
“The half-baked measures announced today will have almost no impact for businesses that are struggling with ever-increasing costs, much of which are a direct result of the Government’s own economic policies. The bottom line is that inaction now poses an enormous risk to our wider hospitality and tourism industry which, as one of Ireland’s largest indigenous employers, supports over 280,000 livelihoods some 70% of which are outside of Dublin.”
“We are calling for an urgent re-assessment of the Government’s policy approach to Irish hospitality and tourism in order to stave off a growing commercial crisis within the sector before it is too late. This must involve a direct intervention by the Government party leaders to address the alarming deterioration in the commercial model of hospitality food services.”
Commenting on the €4,000 business payment, Mr Magner said: “At just under €77 per week, this just deomstrates how out of touch policymakers in Government are with the commercial reality facing hospitality businesses. It falls so far short of what is needed, that it will have almost no impact.”
Mr Magner noted that most small regional hotels with more than 30 bedrooms would be disqualified from this minimal level of support.
