DONEGAL enjoyed a bumper weekend of tourism business with many hotels at full capacity thanks to an influx of visitors over the Northern bank holiday weekend.
However, as the summer season draws to a close a leading hotelier has warned that many hospitality businesses in Donegal will be forced to reduce their opening hours or in some cases close altogether because they can’t cope with rising costs across the sector.
Paul Diver, the Donegal Branch Chair of the Irish Hotel Federation, said many in the industry have genuine fears for the future of the sector.
He said that if government fails to agree to a further extension in the reduced VAT rate of 9 per cent for their sector, many tourism operators in the county will be in trouble.
“Businesses in the hospitality sector have already absorbed massive energy and staffing costs,” Mr Diver said.
“And going forward, with the VAT rate set to increase at the end of the month this will push costs up even further.”
“If the VAT rate does go up they just simply can’t pass it on to the consumer because it is expensive enough as it is,” Mr. Diver added.
“They (the public) can’t absorb it either, so they are just going to cut back on their opening hours and the food that they are offering.
Mr. Diver said that the whole sector is facing a very worrying time ahead, because of what he described as “a perfect storm”.
“It is different in urban areas where they have the demand. But in rural Ireland, especially here in Donegal once the tourists stop coming, that’s it.”
A lot of cafes and restaurants that were closing on Mondays and Tuesdays already, are now saying that they will only be able to open for the weekends.
“That’s not good for the tourism product in Donegal either,” he added.
“Businesses would traditionally use the busy summer months to build up a cash reserve to get them through the quieter winter months but this year, with the costs being so high they don’t have that,” he said.
The reduced rate of 9 per cent VAT for the sector is due to come to an end at the end of August following a six-month extension agreed by the Government designed to help businesses fully recover from the fallout of the pandemic.
Normally the summer season would continue into September but the month ahead is looking worryingly quiet for many hotels in Donegal.
And this is despite the fact that many hotels here were booked out over the weekend.
Today is a bank holiday in the North and many people took the opportunity to spend the weekend at their holiday homes or in hotels and guest houses in Donegal.
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