HOTEL closures imposed by Covid-19 restrictions has cost a Lahinch hotelier a drop of €425,000 in turnover at the end of July compared with the corresponding period last year.
Michael Vaughan who runs Vaughan Lodge predicts that regardless what happens for the remainder of the tourism season 2020 will be a loss-making year.
Commenting on the publication of the new coalition’s much anticipated July Stimulus, the former Irish Hotels’ Federation (IHF) president also estimates he is unlikely to do one tenth of the turnover he generated last year.
Mr Vaughan expressed disappointment over the government’s decision to leave the tourism 13.5% VAT rate for accommodation and food unchanged in line with their counterparts in Northern Ireland who are now benefiting from a 5% rate.
He claimed the new Staycation tax rebate involved a very complicated system, which has excluded a large amount of people who may not have the income to benefit from this initiative.
In view of the fact that €2 billion worth of tourism is made up of day trips to visitor attractions and seaside resorts, he pointed out they have also been excluded by the Staycation rebate.
“A lot of people thought the Staycation voucher would be universal and apply to any type of purchase in a hotel, restaurant or tourism attraction, which didn’t happen at all.
“I don’t think anyone on a minimum wage will benefit from the new Staycation rebate in terms of their take home pay.
“It seems this stimulus was put together in a hurry and is limited in terms of its effect. I hope many of the shortcomings will be addressed in the Budget next October.
“This may be too late for many small and medium sized tourism related businesses who need more direct assistance now in the form of grants,” he said.
Welcoming the inclusion of seasonal workers under the new Employment Wage Subsidy Scheme (EWSS), he noted a number of small businesses in Clare will be excluded due to the stipulation they must have experienced a significant downturn in trade in July, even if they weren’t trading in April, May or June.
He pointed out the drop in the subsidy from €350 to €203 in the EWSS made it marginal for someone who claim unemployment assistance or take up some jobs in the hospitality sector.
He said there was nothing in this initiative for self-employed people conducting walks and those engaged in small and medium sized tourism-related businesses.
Despite the fact the banks has 80% of debt guaranteed by the government for so-called new low interest business loans, he pointed out the 4.5% interest rate is on commercial terms, which is not very beneficial.
He proposed the government should set up a new investment bank within one of the existing bank structures like the Industrial Credit Corporation (ICC), which could give low interest credit in return for an equity stake in the business.
He pointed out the investment return for most tourism-related business developments is usually provided in 15 to 20 years.
Dan Danaher
East Clare correspondent, Dan Danaher is a journalism graduate of Rathmines and UL. He has won numerous awards for special investigations on health, justice, environment, and reports on news, agriculture, disability, mental health and community.