Local hotel facing half a million Euro increase in energy bills

Photo courtesy of Hotel Minella Facebook page

A South Tipperary hotelier says their energy bills will rise by at least €500,000 this year and supports for businesses announced in Budget 2023 will only do so much.

The VAT rate for the hospitality industry had been cut from 13.5 percent to 9 percent during the pandemic in an attempt to help the industry recover.

However, amid accusations of price gouging by hotels, the government has decided not to stick with the lower tax rate and instead restore it to pre-pandemic levels.

Liz Nallen, of Clonmel’s Hotel Minella says that this will inevitably drive up the cost of staying in hotels as their costs have risen due to the energy crisis.

“The rates will go up by probably €8, €10 a room a night, which is just going to VAT.

“We’ll get €40,000 but our energy costs have been increased by €500,000. So our energy bill will go up by at least €500,000 this year, it’s gone up three times, we’ll get €40,000 help from the government on that.

“Dublin has the monopoly, Dublin has the most hotel rooms in the country, Dublin is the one where the prices have increased. It’s more expensive to stay in Dublin than it is nearly to stay in any other city in the world at the minute.

“We’re being blackened all over the country with the saying that hotel rates have increased. They have increased, but they’ve increased higher in Dublin than they have anywhere else in the country.

“You know, the volume is there, the business is in Dublin so why not let the Dublin hotels take the brunt of the increase in VAT rate?”