Gormley has refused to help hotels in rates row
Published 15/10/2010 | 05:00
ENVIRONMENT Minister John Gormley last night refused to intervene to help cash-strapped hotels facing massive local authority rates bills. Hotels warned that their industry faces a "tipping point" as 80 were ordered to pay local authority rates in six days or face the courts.
The Irish Hotels Federation (IHF) said many of its members could not fully pay bills that it believed were excessive. It called on Mr Gormley and local authorities to grant a 30pc waiver on the charges until a revision of values under way since 2001 is complete.
But a spokesman for Mr Gormley said he would not intervene in the dispute. He insisted that commercial rates were a matter for the local authorities. "Granting of a waiver is also a matter for the local authorities -- the minister has no role with respect to this," the spokesman said.
Local authority rates average €1,500 per hotel bedroom per year, but the IHF said bills could be double that in some local authority areas. Just three authorities have completed valuation reviews since 2001. Those authorities reduced charges to hotels by more than 30pc on average, according to the hoteliers.
Furious hotel operators accused Mr Gormley of an "unacceptable derogation of duty" for failing to address the issue. The IHF said Mr Gormley had the right to impose a waiver. It would now take legal advice to challenge the system.
IHF president Paul Gallagher said Buswell's, the 67-room hotel he manages in Dublin city centre, had been served with notice to settle its €125,000 rates bill under the threat of a district court summons.
"We are incensed at the inaction on this issue," Mr Gallagher told the Irish Independent.
He said the rates bill was the second-highest cost the hotel had to deal with after wages.
"I scratch my head wondering what I get for that. We pay separately for water and pay a private company to take away our rubbish. We sweep the street outside the door ourselves," he said. The IHF said hotels paid 6pc of all local authority rates, but accounted for just 1.5pc of the economy.
Mr Gallagher said he had told his members to pay what they could but warned that cash-strapped hotels simply couldn't afford to pay local authority rates from cash flow and feared being brought before the courts would cause nervous suppliers to cut credit to operators.
"Unless Minister Gormley shows leadership on this issue and intervenes, the situation will escalate with disastrous consequences for hotel businesses and knock-on effects for employees and suppliers," Mr Gallagher said yesterday.