Guarded Industry Welcome for Budget 2023 

Tourism and hospitality industry organisations have given a guarded welcome to Budget 2023, welcoming new supports for energy costs but expressing disappointment at the decision to terminate the 9% VAT rate in February next.

Industry sources are, however, hopeful that consideration will be given to a new VAT concession before the start of the next tourist season.

Welcoming the additional funding allocated to Tourism Ireland in Budget 2023, Niall Gibbons, Chief Executive of Tourism Ireland, said:

“We very much welcome the €15 million increase in the Tourism Marketing Fund for next year, allocated in Budget 2023, which demonstrates the Government’s continued commitment to Irish tourism in these challenging times. As we continue and consolidate the recovery in tourism from overseas, this additional funding will allow Tourism Ireland to ‘put our best foot forward’ and roll out a really strong programme of promotions throughout 2023.

"The additional investment will allow us to upweight our campaigns in our international markets, punch through the noise and convert ‘lookers’ to ‘bookers’. We look forward to continuing to work with our tourism industry partners to build a long-term sustainable recovery for our industry.”

The Irish Tourism Industry Confederation (ITIC) said that the Budget was a mixed one for Irish tourism and hospitality businesses. The Temporary Business Energy Support Scheme was welcomed as an important measure to assist businesses with soaring energy inflation, although concerns have been raised that it does not go far enough. Meanwhile Government’s failure to use Budget 2023 to extend the 9% VAT rate was described as disappointing. 

Elaina Fitzgerald Kane (pictured), Chairperson of ITIC, said:

“The energy support scheme will be welcomed by many smaller tourism and hospitality businesses, but the cap of €10k per month doesn’t go far enough for larger energy users such as hotels who have seen their bills triple and quadruple in recent months."

Denyse Campbell, President of the Irish Hotels Federation, said that while elements of the Budget will help hoteliers, the sector feels that the Government have missed an opportunity to continue support for employment recovery and growth in tourism.

“The Temporary Business Energy Support Scheme (TBESS) is broadly welcome for hoteliers that have been hit by shocking energy price increases of over 400% in electricity and 300% in gas prices since 2019, in addition to a severe rise in day-to-day operational costs such as linen (29%), food (22%) and beverages (12%) in the last 12 months. However, we are seeking an amendment to criteria for significant employers so that they can receive appropriate supports.”

Ms Campbell said that the tourism sector will be disappointed with the Government’s decision to increase the Tourism 9% VAT rate by 50% from March 1st next year and that the Government has not fully recognised the importance of the tourism industry to every town and every county in Ireland.