Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

These are three amendments that have been returned from the Seanad with regard to the Finance (Covid-19 and Miscellaneous Provisions) Bill 2022. We will support them. As the Minister said, they provide for an extension of the 9% VAT rate for the tourism and hospitality sector until 1 March 2023. It is worth pointing out that since this initiative was reintroduced in budget 2021, to run from 1 November 2020 until now, wherein it will now expire on 1 March 2023, it has come with a price tag of €902 million. That is a large price tag but we also have to recognise that the hospitality sector has been hit hard during the pandemic. It has a longer tail in terms of recovery. This 9% VAT rate will benefit a considerable number of areas, including restaurant supplies, tourist accommodation, cinemas, theatres, museums, historic houses, open farms, amusement parks and hairdressing, to name but a few. It is there to support the sectors that have been disproportionately impacted as a result of the pandemic and to support employment and business survival into next year.

It is clear that the hospitality and tourism sectors have been considerably impacted but it should be noted that they have also received a large financial support from the taxpayer. Accommodation and food services have received more than €2 billion in subsidy payments through the employment wage subsidy scheme and warehoused nearly €500 million of tax through the tax warehousing scheme. They will now benefit from an extended reduction in the VAT rate. While this reduction will benefit sectors and big businesses that are genuinely struggling to enjoy pre-pandemic levels of trading, it will also benefit sectors that deserve greater scrutiny, especially the hotel sector in this city.

According to Fáilte Ireland's February 2022 hotel survey, hotel room occupancy jumped from 33.9% in January to 53.6% in February and demand is continuing to pick up due to relaxing Covid-19 restrictions. Bed space occupancy, the proportion of available bed space sold during February, was also well above January's rate of 24.3%, at 38.6%. However, room occupancy continued to lag behind pre-pandemic levels. In relative terms, room occupancy was nearly 17% below February 2019. Nonetheless, as has been the current trend, hotel room rates have surpassed those recorded before Covid-19. We see from the consumer price index that the price of hotel accommodation went up by 8.3% in April alone. Already in March, it had increased by 5.5% and it has gone up 20% in the past year. As we see real-time prices in May, the price is obviously increasing again.

It is clear that Dublin hotels have bounced back from the pandemic, with prices bouncing back even higher, as has been described by Conor Pope in The Irish Times. High hotel room prices have a serious impact on domestic tourists, those who need to come to the city for hospital appointments and others. It also has the impact of discouraging foreign tourists from visiting the capital and it has a knock-on effect on the other hospitality sectors that depend on those tourists. Given the significant State largesse distributed to the hotel sector at the taxpayer's expense, it is galling to hear some in the sector complain that hotels cannot compete with the social insurance system.

My suggestion is they should compete by increasing pay and improving workers' terms and conditions, which is a good start. There have been unprecedented State supports during the pandemic. It has been a form of corporate welfare which was necessary at the time. For the sector to call for cuts to social welfare will not cut it. Hotels are the beneficiaries of this 9% extended VAT rate, which will cost a total of €902 million since its introduction. There is a clear need for the Minister, on behalf of the Government, to outline the expectation of this VAT extension and how it will be passed on to customers. It is hard for many people to take. I know one cannot differentiate between the hotel sector and other sectors involved in tourism. I just went on to booking.comto look at hotel prices for the weekend after next. One night, which is in the Shelbourne, in fairness, costs €1,067. One night in another hotel costs €579. I am reading these out as they appear. Others cost €580, €516, €495, €499, €314 or €1,840 to stay in the Clarence for one night. Others cost €518, €634 and €441. These are rates that nobody can pay.

Hard cases come to our constituency offices involving young children who may have had to go to Temple Street hospital or Crumlin hospital and people ask if we know anybody in Dublin who will open their house to them. They cannot afford these rates of €400, €500 or €600 to stay in hotels that have benefited massively from taxpayers' money over the past two years. I am taking this opportunity, because I think it is appropriate, since the hotel sector will benefit from the 9% extended VAT rate, to ask the Government to intervene on the price gouging I believe is taking place in the sector. There is no way that hotel rooms should cost that amount. That will impact our tourism sector. We are not even into peak season. It will impact our tourism product and it will have a serious impact on individuals. As I have mentioned before, many people are impacted who were considering holidaying in Ireland and looking at short stays here in the city.

Hotel costs are not just high in this city. People on local radio stations have said they have gone to London instead. A woman called Marian was on Ocean FM. She said that on a Saturday night, she was going to be charged €888, €900 and €999 for one night in Dublin at three hotels. She did not go. She went to Britain instead. This is a trend that needs to be dealt with. The Minister of State said the 9% extension is a two-way street. The hotel sector needs to meet taxpayers mid-stream, because the taxpayers have supported this sector over a long time, particularly during the pandemic.

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