Hoteliers lay out growing challenges facing sector

DONEGAL’S political representatives have been told of the “skyrocketing energy costs” and other challenges facing the hospitality sector.

Hotel and guesthouse owners met with TDs and senators to discuss what the future holds for the tourism industry as 2023 approaches.

While there has been a welcome upturn in tourism in 2022 businesses remain in recovery mode having survived the worst economic shock in living memory.


With Covid on the wane though, a new set of difficulties have emerged in the form of rising costs and a predicted global economic downturn.

Chair of the Donegal branch of the Irish Hotels Federation Paul Diver said it was vital that everything possible is done to secure tourism livelihoods and support the long-term sustainable development of the industry.

“Irish tourism businesses are collectively the largest indigenous employer in the country,” Mr Diver said.

“Here in Donegal tourism accounts for 7900 of jobs and €249 million of revenue annually.

“Speaking with local TDs and senators it is clear that they understand the value and importance of tourism to our local communities but also the enormous impact multiple factors are having on these businesses right now.

“Over recent months unforeseen challenges have arisen including the continued war in Ukraine, the increasing risk of a global downturn and escalating business costs and ongoing energy crisis. This in particular is causing real concern for hotels and guesthouses here in Donegal.

“Nationally we are seeing hotels reporting increases of upwards of 300 per-cent in energy bills compared with 2019 levels. This is unsustainable and will inevitably lead to difficulties in relation to future viability of some businesses in the tourism sector.”


Tourism brings €249m into Donegal annually. Hoteliers discussed with local political representatives the importance of the nine per-cent tourism VAT rate.

Hoteliers also discussed with local political representatives the importance of the nine per-cent tourism VAT rate and how this is right for the development of Ireland’s largest indigenous industry.

“The current nine per-cent rate is the right rate for Irish tourism in a European context,” Paul Diver said.

“Increasing the tourism VAT rate by half to 13.5 per-cent in March 2023 would make Ireland’s tourism VAT rate the third highest in Europe, far above other European countries where they take tourism seriously like Portugal, Malta and the Netherlands.

“Tourism is an important part of the local economy here in Donegal and the continued recovery of tourism and hospitality must be to the fore of government economic policy as we seek to support businesses throughout these continued uncertain times.”

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