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Ken Tobin, TCA.
THE increased VAT rate is having a major negative impact on hotels and restaurants in Tralee according to the results of surveys commissioned by Tralee Chamber Alliance.
The hospitality sector in Tralee is now calling for greater action to sustain the industry over the coming 12 months.
Ken Tobin of Tralee Chamber Alliance said; “We anticipated an impact on the tourism and hospitality industry, and knowing that we were facing some uncertainty for the sector, we engaged Consultants to help us develop a Tourism Strategy, which will set out a clear framework on how we grow the sector over the coming years.”
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Tralee Chamber Alliance will publish an Economic Tourism Strategy for Tralee in mid-July, which will set out how the town can develop over the coming years to improve its tourism and hospitality industries.
Ken Tobin outlined; “We knew the increased VAT rate, and increased investment in the midlands of Ireland would have an impact on the sector in Kerry, so in addition over the past year we have been working very closely with our colleagues throughout the entire County, including Dingle and Killarney, in order to support the entire county’s tourism sector.
“These surveys confirm what we expected, which was that the increased VAT rate and rising employment costs would affect Kerry much heavier than other counties in Ireland, because it’s our largest employment sector.”
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“There is no doubt about it, that we will need to invest heavily in supporting the hospitality and tourism businesses in Tralee, this will mean we must develop new attractions, improve our existing amenities and improve the attractiveness of the town.”
While reserved in their expectations for the next year, the surveys demonstrate the negative impact the increased VAT rate and rising staff and insurance costs are having on the sector in Tralee.
The surveys show that over 72% of Tralee Hotels and Restaurants still reflect very good value for money compared to other locations, however in two separate surveys, one for the Restaurant sector and one for the Hotel sector in Tralee, over 90% of respondents highlighted the increased VAT rate as having a major negative impact on their businesses.
Highlights of the surveys showed:
• Hotel: 43% expected up to a 10% decrease in trade over the next 12months, with over 85% having already experienced a decrease so far this year compared to 2018
• Restaurants: 50% expected up to a 10% decrease in trade over the next 12months, with over 80% having already experienced a decrease so far this year compared to 2018
• Hotels: 75% have seen a decrease in international visitors by 10% or more, and 71% reporting a decrease in Irish ‘Staycationers’ by up to 30%.
• Restaurants: 100% of respondents cited the Tralee Food Festival as having a positive impact on business in 2019
• Hotel: With varying factors impacting business, the largest negative effects have been Brexit 59%, Staffing Costs 86%, Insurance Costs 88% and VAT Increase 100%.
• Restaurants: With varying factors impacting business, the largest negative effects have been Staffing Costs 80%, Running (Utilities, Rents, Suppliers) Costs 90%, Insurance Costs 90% and VAT Increase 90%
“Locally the industry is calling for improvements to be made at the entrances to the town, and to our public areas including the town park and playground to enhance the town not just for visitors but also for locals”
“While the rest of the country is indicating a slight upturn in tourism figures at 5% for the year ahead, the competitiveness of Kerry has been overly impacted and immediate action is needed at both a National and Local level.”
Hard to believe that the increased vat rate is the cause of the decline as the decrease was never passed on to the consumer in the first place but businesses were very quick off the mark to inflict the increase onto their customers!!!!