Hotel trade calls for 30% rates reduction

THE HOTEL industry has called for an immediate 30 per cent reduction in the commercial rates they have to pay to stave off an “emergency” in the tourism sector.

The Irish Hotels Federation has warned that more than 80 per cent of its members plan to lay off staff over the next three months, with some laying off one-quarter of their workforce.

The federation’s chief executive Tim Fenn told members of the Joint Oireachtas Committee on Environment, Heritage and Local Government that hotels were being placed in a “ludicrous situation”, where there had been cuts in costs in everything except the cost of doing business with the State. He said the situation was so serious that the Government would have to bring in emergency provisions to force local authorities to reduce their rates.

He criticised the failure by the office of the Commissioner of Valuation to revise rates in only three of the 88 local authorities.

The federation received a letter from Minister for the Environment John Gormley in July stating that the use of a rates waiver scheme in respect of commercial property would be unfair and it would be “highly unlikely” any local authority could absorb any shortfall which gave rise to a negative impact for other rate payers.

Mr Fenn said when re-evaluations were carried out, it led to a reduction of 30 per cent in the rates charged to hotels.

Buswells Hotel manager Paul Gallagher, who is also the federation’s president, said his hotel had to pay €125,000 last year in rates.

Cork hotelier Breda Keane, the manager of the Oriel House Hotel in Ballincollig, told members of the committee that her 78-bed hotel paid €248,000 in rates every year, an average of €3,180 for each room.

Labour TD Joanna Tuffy said local authorities had also suffered in the recession, having lost 3,000 jobs since it started.

Fine Gael environment spokesman Phil Hogan said that the hotels’ best chance of getting their rates reduced is to get the Commissioner of Valuation to speed up his rate revisions.