Hotels demand a 30% cut in local authority rates
Industry says councils ‘levy’ hotels up to €3,000 a room regardless of occupancy
Michael Vaughan: says there is “nowhere else” for hoteliers to cut cost and increase competitiveness. “Government-determined costs, on the other hand, have not changed to adapt to the new economic reality.” Photograph: Eric Luke
A cut in local authority rates by up to 30 per cent is being demanded by hoteliers and guesthouse owners as they gather in Co Meath for their annual conference today.
The Irish Hotels Federation said the high cost of doing business in Ireland was the industry’s “single most pressing issue”. Some hotels were paying local authorities rates of up to €3,000 a room, regardless of occupancy.
The accommodation providers identified costs over which it had no control – including rates, water charges and energy-related levies – as issues that had a heavy impact on its ability to support some 200,000 jobs in tourism.
Also expected to be identified as an issue at the two-day conference is the “debt legacy” of the boom, which continues to impose significant servicing charges on hoteliers and guesthouse owners.
The federation has called for a clearly defined national competitiveness strategy under the control of the Government for all business costs.
According to federation president Michael Vaughan, the sector had reduced costs over which it could control by almost a quarter since 2008. Hotel and guesthouse business stabilised in 2013, “largely as a result of the relentless work of hotels and guesthouses to slash costs where there was any level of flexibility”.
However Mr Vaughan said there was now “nowhere else” for hoteliers to cut cost and increase competitiveness. “Government-determined costs, on the other hand, have not changed to adapt to the new economic reality.”
Outside of business operators’ control, the biggest single cost is local authority rates, with many hoteliers being levied rates of up to €3,000 a bedroom and average local authority rates equating to €1,500 a bedroom, regardless of occupancy rates.
In the Republic, the Valuation Act 2001 changed the way rates were charged to businesses. Before the Act, businesses could seek a revision of their rateable valuations on a number of grounds including deterioration in their profitability. However the 2001 Act removed this on the basis that the legislation envisaged revisions every five to 10 years.