‘The way it is going, a pint will be €7 by Christmas’ - Cllr Micheál Naughton

Donegal’s tourism sector and the small businesses it supports are in desperate need of government support.

That is according to Cllr Micheál Naughton (FF), who has renewed his plea for the reduced VAT rate for hospitality businesses to be reinstated.

During the Covid-19 pandemic, the rate was reduced from 13.5% to 9% to help counteract the devastating impact of Covid-19 on the hospitality trade. This temporary measure was due to end in December 2021 but was extended to August 2023.

However, Cllr Naughton has continuously appealed for the rate to be reinstated in order to help Donegal’s hospitality businesses to keep their doors open. 

As manager of the Clanree Hotel, he is acutely aware that food and drink inflation, energy costs and the minimum wage increase are all taking their toll. 

Speaking at the July meeting of the Municipal District (MD) of Donegal, he said: “This is a huge issue with tourism being the second biggest employer in Donegal after agriculture.”

One example Cllr Naughton gave was that leading drinks supplier Diagio had increased prices twice already this year. 

“The way it is going, a pint will be €7 by Christmas,” he said. 

Hotels and other businesses were dealt another major blow with the Aer Lingus strike.

“Tours were cancelled because of the strike,” he said.

The councillor acknowledged that some members of the Hotel Federation were contributing to a feeling that there was greed in the industry. 

“We saw some of the prices that were being charged in Dublin when the matches were on at the weekend,” he said. “That is giving us all a bad image. 

“But as I have said before, there is value to be had here in this county.”

Cllr Naughton appealed to Donegal County Council and Donegal Tourism to write to the relevant government departments to ask for a reduction in VAT.

“I am calling on Donegal County Council and Donegal Tourism to look for this for the tourism sector and the small businesses as well,” he said. 

Director Designate of Donegal MD Garry Martin said that he would write the letter outlining the concerns and asking for support for businesses.