Donohoe warns tourist industry over ‘rip-off prices’

Minister for Transport and Tourism Paschal Donohoe has warned the tourist industry against a return to "any perception of rip-off Ireland".

He said the retention of the nine per cent Value Added Tax (VAT) rate for tourism in the upcoming budget was conditional on not seeing a return to past behaviour which caused damage to Ireland’s brand.

“We can’t get back to any perception of rip-off Ireland for international or domestic tourists...When we got to this point in the performance of our tourism sector a number of years ago, really big mistakes were made in not offering good value to people who were in our country.

“Our hotels, our restaurants and our cafes got too expensive for a while and it caused gigantic damage to Irish tourism. That mistake cannot be made again.”

Speaking in Clontarf on Wednesday, Mr Donohoe said he kept the matter under continual review.

“That’s why I’m always clear that the retention of the 9 per cent VAT rate is conditional on not seeing a return to the kind of behaviour that caused such damage in the past.”

However, Mr Donohoe said he would like to see the rate retained in the upcoming budget.

He said he was happy the consumer was currently benefitting from the reduced rate.

“As long as the nine per cent VAT rate delivers against those objectives I would champion for its protection.”

Mr Donohoe said a decision about the rate would be taken in the context of the estimates process that will be finalised after the summer.

"It's a decision that Minister for Finance Michael Noonan will have to make," he added.