Sir, – Justine McCarthy’s article “Many hotels and restaurants are thriving at our expense” (Opinion & Analysis, February 24th) cannot be left unchallenged.
Her argument that the sector’s 9 per cent VAT rate should not have been extended by Government seems to be based on her experience of two busy Dublin city centre restaurants as well as the five-star Shelbourne Hotel.
Such a small sample size is certainly not representative of Ireland’s largest indigenous industry.
This is an industry consisting of 20,000 businesses, the vast majority SMEs with modest profit margins and 70 per cent of which are located in regional Ireland.
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Value is a key concern for the author, as it is for industry leaders. Irish tourism’s value proposition is under increasing pressure as costs of business soar. Acute tourism accommodation shortages due to Government policy will only compound the situation this summer. Increasing supply will moderate price; increasing VAT would only do the opposite.
When discussing the 9 per cent VAT rate, pejorative terms like “handouts”, “perks” and “pandering” litter the opinion piece. They all miss the point. VAT is a consumer tax – by law it is added at the end to the price of a bedroom or meal.
Some businesses might be able to absorb a VAT increase to their bottom line but the vast majority have no choice but to pass it on to the end user.
In such an inflationary cycle, Government was right to extend the 9 per cent VAT rate.
The article’s conclusion that tourism lobbyists are those that “shout the loudest and get the willing ear” is ironic.
Perhaps this should have been better directed at the newspaper industry, which lobbied for, and secured, a VAT rate of zero that came into effect on January 1st. – Yours, etc,
EOGHAN O’MARA WALSH,
Chief Executive,
Irish Tourism Industry
Dublin 18.
Sir, – Next time Justine McCarthy is dining out in Dublin she should consider that out of every €10 she spends in a restaurant, 82 cents goes to the €3 to the staff, €3 to the butcher, farmer and fishmonger, and €1 to the landlord and Dublin City Council.
Out of the €2.18 that’s left, we have to pay the electricity, gas, insurance, linen, cutlery, crockery, glassware, consumables, and handmade soaps (which, incidentally, are not intended to be taken home as part of the price of a meal).
We also have to build and maintain a commercial kitchen, and for this you won’t see much change out of €100,000. Which is a fraction of the cost of a front-of-house fit-out.
In short, you would want to be mad as a bag of cats to open a restaurant.
Thankfully many of us are. – Yours, etc,
RÓNÁN ROGERSON,
Dublin 8.