Hotels head criticises Dublin Corporation plan for tax on visitors as `disastrous news'

The Irish Hotels Federation has strongly criticised Dublin Corporation's suggestion that a £3 overnight tax be imposed on visitors to raise funds to improve the city.

Expressing "serious concern", the IHF's chief executive, Mr John Power, said last night: "In an already overtaxed industry, where tourists coming to Ireland are taxed heavier than in most other countries, the suggestion of an additional tax is disastrous news for tourism."

In a statement, Dublin Corporation said that under the suggested scheme, which it estimated had the potential to raise about £10 million, the maximum a person would pay for a continuous stay would be £10.

It said the economic boom was welcome but resulted in additional burdens on the services in the city. "The money raised from this tax will be ring-fenced for specific services related to the tourism sector - facilities which are absent, or deficient, throughout the city at present. These will include support for Dublin Tourism, improved environmental services, tourism information centres and assistance to visitors in the city." it said. The corporation said that visitor numbers to Ireland increased by 7 per cent last year, with an 8 per cent increase estimated for this year. Bed-night sales in hotels and guesthouses in Dublin city this year were estimated to reach 3.5 million. "Every major city has a hotel tax. In the USA the average tax is 12 per cent, while in Spain it is 7 per cent," it added.

Mr Power said the Spanish tax was a VAT, while what was imposed in the United States was a tax on all sales in all businesses, not specifically related to hotels or even to tourism. The United States had no VAT, while in Ireland it was 12.5 per cent. "Irish tourism operates in a highly competitive international environment, in which we have outperformed our competitors and gained substantial market share over the last 10 years. Why are we considering the introduction of a disincentive to visit Ireland?" A spokesman for the Department of Tourism, Sport and Recreation declined to comment, but said its proposal for a £3 tax on all visitors was still under consideration. A spokesman for Bord Failte said it had not considered the matter. "But the board did discuss the future funding of tourism promotion and came to the opinion that the tax proposed by the Minister was probably the best option to be pursued provided it meets tax and legal requirements."

Mr Frank O'Malley, of the hotels, restaurants and catering branch of SIPTU, said Dublin Corporation's suggestion was extremely short-sighted and could have a serious impact on employment.