Challenging Times ahead for Hospitality
As autumn approaches, the evenings are becoming shorter and the weather colder. This is normal. Seasonality, we all understand. What is not normal or understood is the insane and unmerciful increases in the cost of keeping a business open and viable in the face of an onslaught of charges, unprecedented in recent times. The scale of these costs is mind numbing.
Overnight, some businesses have seen a quadrupling of cost. For hoteliers, the cost of energy has gone up, in some cases, by 1,100 % – which if continued will force many of business.The EU is attempting to tax supply companies on excessive profits in order to recoup an estimated €140 billion – how this can be achieved remains to be seen. It will be of interest to see how this money can support industry in the interim.The Irish government has promised to introduce substantial supports to the industry in the budget. But suggestions the Minister is planning to restore the reduced 9% VAT rate on tourist businesses to 13.5% next year pours fuel on the fire.
Unless substantive supports are introduced the winter could be a long and harsh one. The concern is that, over the winter months, some properties may be forced to reduce availability of accommodation and services to the consumer. This crisis, so close to the pandemic, is the perfect storm. Many people in the sector have expressed the possibility of their businesses closing, resulting in the loss of jobs, not to mention the loss to the exchequer. Hopefully this can be dealt with in a positive way.
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Read the full September / October 2022 Magazine Publication.