Wednesday 4th November 2009

Dublin Hotels Call for Immediate 30% Reduction in Rates
Proposal to pay 70% of rates bill to Dublin City Council & Dun Laoghaire Rathdown

The Dublin Branch of the Irish Hotels Federation today confirmed that it has written to two Dublin area county councils calling for a 30% reduction in rates applicable to hotels and guesthouses until such time as the rateable valuations of these properties have been revised as provided for in the Valuation Act 2001. Martin Mangan, Chairman of the IHF’s Dublin Branch states that members will, however, honour the water rates fully for 2009.

This action follows a deep rooted frustration by hotels and guesthouses at the lack of progress made by the Valuation Office in to carrying out a revision of rateable valuations as provided for in the Valuation Act 2001. Mr Mangan states that the proposal to freeze rate payments at 70% of their 2009 level is due to the result of the revision of valuations in the South County Dublin area resulting in a reduction of the rate bill for hotels averaging 30%.

According to Mr Mangan, Dublin hotels have been paying commercial rates considerably over the odds over the last number of years and disproportionately subsidising the rates liability of other business premises. This inequity is undisputed and borne out by the recent revaluation by South Dublin County Council which resulted in a 30% downward adjustment in rate changes in 2009 to hotels in that area. Mr Mangan maintains that hotels in the Dublin City Council and Dun Laoighre Rathdown areas cannot afford to continue paying the inequitable level of local authority rates being levied on them.

 “We have long maintained that the system for calculating rates for businesses is flawed. It needs to move away from extracting taxes relative to the size of premises without any recourse to the level of turnover or overheads of the business. South Dublin County Council has completed its revision, and that process has resulted in reduced rate bills for hotels and guesthouses of at least 30%. With eight years having now passed since this legislation was enacted, hotels can no longer tolerate this slow pace of carrying out the revision particularly as it appears that hotels are being charges excessive rates in the intervening period.”

Mr Mangan states, “Our proposal to pay 70% of rate charges being sought for 2009 is in response to the fact that it could be years before the Valuation Office carries out revisions in Dublin’s other local authorities. For hotels in Dublin, our proposal is a fair solution given that a precedent has now been established on rate valuations.”

The IHF Dublin branch states that the current economic conditions are having a very severe impact on most hotels in the Dublin area. A significant number have already taken substantial measures to reduce overheads ranging from pay cuts of up to 30%; they have laid off staff and renegotiated with suppliers where possible to keep costs keen. In the midst of the downturn, however, one of the local authorities has increased rates by 3.5% in 2009 alone.

“We are urgently calling on Dublin City Council and Dun Laoghaire Rathdown County Council to agree to a realistic rate solution, as we believe that following a revaluation we may expect reductions to our rates of approximately 30%. We understand that it will be at least 2012 before the process of revaluation in Dublin City Council area begins Given the number of businesses involved, it could take several more years before adjusted rates are agreed with the relevant businesses concerned. Dublin Hotels cannot wait for this inordinately prolonged process in which delays benefit local authorities rather than businesses struggling for their survival”

“Dublin hotels and guesthouses have been paying rate increases year on year without recourse to independent assessments. We have been asking for this issue to be addressed for too long, and it hasn’t been addressed. Excessive local authority rates are having a devastating effect on hotels, which are already struggling to deal with decimated revenues and cost bases that have not yet adjusted to the changed economic reality on the ground. Our members are willing to pay rates at a fair and equitable level but simply can no longer bear the current rates that are imposed in this unprecedented environment,” adds Mr Mangan

Tourism’s contribution to the Irish economy

According to the IHF, tourism is Ireland’s largest indigenous industry, employing over 200,000 people across the country. Notwithstanding the recession, tourism made a direct contribution of €6.3 billion to the Irish economy in 2008, representing 4% of overall GNP. The main economic contributions of the tourism industry include:

• €4.8 billion in foreign exchange earnings in 2008 compared to €2.1 billion in 1995 and €4.3 billion in 2005;
• 7.4 million overseas visitors to Ireland in 2008;
• Domestic tourism expenditure of €1.5 billion in 2008;
• Annual national tourism revenues of €6.3 billion
• Tourism accounted for 4% of GNP and 2.2% of Gross Value Added
• Tourism generates 7% of services exports
• Tourism industry accounts for 200,000 full-time, part-time and seasonal jobs, of which almost 60,000 are in the accommodation sector alone.
• Provides a substantial entrepreneurial resource as the vast majority of tourism enterprises are small and medium enterprises.
• 925 hotels with 60,729 rooms.
• 337 guesthouses with 4,070 rooms.

FOR INFORMATION:
Siobhan Molloy / Eoin Quinn              Tel: 01 6760168
Weber Shandwick                              Mobile: 086 817 5066 / 087 233 2191