Hotels pay '€3,000 rates' per room

The single biggest issue facing the tourist industry is local authority rates with hotels and guesthouses paying up to €3,000  per room regardless of occupancy, the Irish Hotels Federation annual conference was told today.

Federation president Paul Gallagher said a promised a review of rates in 88 local authorities had been completed in just three local authorities, in the ten years since the introduction of the Act.

He said hotels and guesthouses were paying an average €1,500 per bedroom - a figure which meant some rooms were operating at a loss. Rates paid by hotels and guesthouses ranged from about €75,000 per year in Co Longford to more than €26m in Dublin.

But despite the urgency of the situation, he said it would take a further decade to complete review the outstanding areas.

Mr Gallagher said "exorbitant rates are slowly strangling individual businesses with local authorities ignoring the vast majority of attempts by distressed businesses to negotiate their bills". The federation has published details of an industry survey which show local authority rates and wage-and-utility costs are the most pressing issues affecting the business.

"Prior to the enactment of the Valuation Act businesses could seek a revision of the rateable valuations on a number of grounds including a deterioration in the profitability of the business," said Mr Gallagher.

"The 2001 Act should be collapsed and new legislation introduced to expedite the revision process and ensure adequate resources are available to valuations office to ensure all rateable properties in the country have their valuations revised very five years."

He added the outgoing Government had acknowledged the current system was flawed and intended to speed up the rates revaluation. "This recognised the inherent inequities in the rates system which sees hotels and guesthouses continue to subsidise other commercial rate payers as local county and city managers bury their head on the issue".

The hotels federation also said the incoming government should also establish a "reconstruction and development bank" or a special banking division within one of the State-controlled banks to address the sector's problems in getting credit from the banks.

Hoteliers see a guarantee scheme similar to that in operation in the UK , where at least 50 per cent of qualifying loans to viable businesses are guaranteed, as being a potential solution to the credit squeeze. Borrowers would pay a premium of about 2 per cent to support the scheme.

The federation is also urging the new government to undertake a review of the Commission for Energy Regulation to result in lower energy prices. The Federation said last year’s energy levy has resulted in additional average costs of €7,000 per hotel.