Pat Casey (Fianna Fail) | Oireachtas source

I welcome the Minister and thank him for coming here. I would have preferred if the debate had been on the VAT in the hospitality sector rather than the specific 9% VAT because cases can be made about the different services offered by the hospitality sector. I will speak this afternoon maybe not as a Senator but as a hotelier who raised in the hotel industry. I have lived every day of it and every day there is some discussion about the hospitality sector in my family.

The industry has suffered its greatest shock since the advent of the Troubles in Northern Ireland, which set back our industry by more than 30 years. It has only been since the Good Friday Agreement that we have begun to see the true potential of tourism in Ireland. Unfortunately, the two years of Covid and the cost-of-living crisis, driven by rise in the cost of energy as a result of the war in Ukraine, have set the industry back a significant amount. That is why, when it was announced on budget day that the extension of the VAT rate was not going to be maintained, I was a little disappointed. I was disappointed that, given we, as a Government, had invested so much in the industry to keep family businesses afloat, as has already been identified, not to have kept the VAT for another period in order for the industry to recover to its true potential and reach where it was in 2019 is a missed opportunity. If there is the opportunity to prove the economic importance of having that, I would openly love that debate. That is what the Tánaiste referred to, which is that the economic situation will decide it.

The Minister has identified the importance of tourism. It is the one industry that goes across the whole nation. The industry is involved in every region and in every town and village. It is probably the single most important industry for rural Ireland. It is the lifeline for certain communities in Ireland. It is the only industry in certain regions in Ireland. Operating a tourism facility in rural Ireland is completely different from operating one that provides access seven days a week, 52 weeks of the year. That is why I pose a number of questions.

Why have so many hotels turned their back on what they believe to be their industry and offer their places as refugee centres? That has happened because the hotel sector, especially the budget and value hotels, has found it is no longer viable to keep the doors open. We all have immigrants somewhere in our families. My brother lives in America. We all have uncles and aunts living all over the world. We went for economic reasons. I welcome the Ukrainians. They have come here because of war. That is not the issue I am raising. I am raising the issue of the viability of the hospitality sector. If we look at the tourism reports that were published last September and the tourism market for the hospitality sector in 2022 compared with 2019, overseas tourism is down 49%, tourism from Northern Ireland is down 47%, and tourism from the Republic is down 35%. There is a huge gap to get back to where we were.

The second most identified thing about Fáilte Ireland was the skills and staff shortages, where 30% of businesses said they could face closure because of staff shortages. We are already seeing that, more appropriately, in the food sector where we have seen restaurants and cafés closing. They are either closing or they are on a four- or five-day week. In the hotel sector, certain aspects of hotel services are not being provided due to the shortage of staff. That is also not allowing us achieve the potential we have there and delivering on the viability.

Warehousing has been mentioned and I welcome the news yesterday about the extension of the scheme. The hospitality sector was the largest user of it. Nearly 30% of its tax debt has been warehoused. It is in excess of €402 million across 10,000 businesses. These businesses still have to repay that money, and they are in the tourism and hospitality sector.

Price gouging in the accommodation sector has been mentioned. That practice is not wholesale in the hospitality or hotels sector.We have more than 930 hotels in Ireland, the majority of which were behaving themselves. It has done irreparable damage to us in the domestic and international markets and I will not stand over that.