Fine Gael Parliamentary Party meets with hospitality sector

Fine Gael parliamentary party members met with representatives from the hospitality sector this week who outlined the challenges facing their sector.

Industry representatives who met members of the Fine Gael parliamentary party included the Restaurants Association of Ireland (RAI), the Vintners’ Federation of Ireland (VFI), the Irish Tourism Industry Confederation (ITIC), the Irish Hotels Federation (IHF), and the Licensed Vintners Association (LVA). They told the meeting that small businesses working in hospitality and tourism are finding it hard to absorb increased costs and should be afforded the benefit of a lower VAT rate if they are to continue to survive and thrive. They cited increasing labour costs as one of the main reasons behind declining profit margins, which they say can be as low as 1% for some small businesses.

Senator Micheál Carrigy, who organised the meeting, said: “We had a very honest and open discussion with representatives from the pub, hotel, restaurant, and café trade, during which they acknowledged the support that they’ve received from Government.

“Within five weeks of being appointed, Fine Gael Minister for Enterprise, Trade and Employment Peter Burke announced a package of 15 supports aimed solely at SMEs. They include:

• A second phase of the Increased Cost of Business (ICOB) Scheme, focussed on businesses in the hospitality and retail sectors;
• Linking the lower rate of employers’ PRSI to the minimum wage and;
• Changes and upgrading of business grants and supports, including sustainability grants, trading online vouchers and microfinance loans.

“However, we did hear what they had to say about the current 13.5% VAT rate, which has been back in place almost a year, having been reduced to 9% during the pandemic period. It is the sector’s view that reverting to the 9% rate would provide the crucial boost required to underpin our hospitality and tourism industry.

Senator Carrigy continued, “The estimated cost of a reduction of 4.5% is significant – it would cost the exchequer in the region of €545 million and any decision involving taxpayers’ money must be weighed up carefully. Fine Gael is a pro-enterprise party, and this meeting will feed into our work over the coming weeks and months”.

Fine Gael Parliamentary Party Chair, Deputy Alan Farrell said: “Fine Gael is listening to those directly involved in the hospitality sector, to understand their concerns and how to best support their industry. We are a party that values enterprise, so it’s critical that we have these discussions now to guide us in any future planning for the sector.”