Uncertainty how VAT changes will affect hospitality sector . . .

IT IS uncertain what the VAT rates reverting to 13.5 per cent will do for the hospitality sector and the pricing of rooms, according to Dalata Hotel Group, who operate all Maldron and Clayton brands in Ireland.

The reduced 9 per cent rate of VAT for hospitality reverted to 13.5 per cent on September 1, as signalled by the Government.

Group chief executive Dermot Crowley acknowledged that the price of a hotel room rises from €120 to €125 because of VAT, but says it will be hard to know if a customer would have been willing to pay it in the first place.

Speaking to The Irish Times, Mr Crowley said the reduced rate of VAT for the wider hospitality sector was difficult to work out the probable impact of the policy pricing, but said the move “is not positive” for the sector.

“I think that debate often gets mixed up with the pricing. It was seen as a temporary reduction but the reality is at

9 per cent, the rate in line with countries like Portugal, which is 6 per cent, Spain, Italy, and France where it is 9 and 10 per cent.”

Dalata reported a 29 per cent year-on-year increase in hotel revenues to €284.4m for the six-month period to the end June in half-year results.

RevPAR (revenue per available room), a key metric multiplying a room’s average daily rate by its occupancy rate, rose by 23pc to over €112.

Mr Crowley also said that Dublin, Dalata’s biggest individual market, is no less safe than other big cities but continues to grapple with similar post-pandemic issues to other urban centres.

For full access to all content on Echo.ie and to support the continuation of local news and local journalism in your community subscribe HERE.

Thanks for your ongoing support.