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Tourism to play key recovery role, says hotels chief

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‘Only show in town’: Tim Fenn, CEO of the Irish Hotels Federation. Photo: Tom Burke

‘Only show in town’: Tim Fenn, CEO of the Irish Hotels Federation. Photo: Tom Burke

‘Only show in town’: Tim Fenn, CEO of the Irish Hotels Federation. Photo: Tom Burke

Tourism is the "only show in town" for many places across Ireland and will play a key role in revitalising the economy once the pandemic has ended, according to Tim Fenn, CEO of the Irish Hotels Federation.

Despite the wounds being inflicted on the economy during the crisis, Mr Fenn said his association is not seeing the same kind of fallout in the hotel sector that was experienced during the financial crash, when banks pulled the plug on many hotels around the country.

Mr Fenn said that between 2004 and 2008 there had been a 32pc increase in hotel capacity, spurred by generous capital allowance schemes which encouraged investors to pile into the sector.

But the rug wasn't pulled from under those schemes in time.

Mr Fenn warned that if banks were to repeat the wave of hotel repossessions they undertook in the last recession, it would start a "race to the bottom".

"It's going to bring down the value of all our assets and that's not going to be sustainable," he said.

Mr Fenn said that in the short term at least there will be a question over the amount of hotel capacity in the Irish market.

However, he said all that capacity might not be available for some time due to social-distancing requirements which may be needed in hotels and guest houses.

"There's a whole level of unknown in all this," he said.

The Irish Hotels Federation has sought the re-introduction of a 9pc VAT rate for hotel and other sectors, as well as addressing local rates paid by hotels.

But it was left disappointed over the weekend when a €6.5bn package of business supports unveiled by Finance Minister Paschal Donohoe didn't include the hoped-for cut.

The federation said the supports aren't sufficient for the tourism sector.

"We want the Government to restore the 9pc rate on a permanent basis," said Mr Fenn.

"We understand the Exchequer is in serious trouble. We just want them to recognise that there are 28 countries in Europe that have lower VAT rates than we have."

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