The rate hotels pay VAT increase will increase from 9% to 13.5% from March 2023, Minister for Finance Paschal Donohoe announced as he delivered Budget 2023. 

During the pandemic, the Government cut the rate paid by hospitality venues such as pubs, hotels and restaurants as restrictions caused their incomes to plummet. 

With COVID restrictions now consigned to the history books, Minister Donohoe was reportedly keen to see the VAT rate return to its original rate. 

The hotel sector in particular has been criticised for charging huge prices during the summer and Mr Donohoe said their behaviour was a matter of “real regret” to him.

However, the Hotels Federation of Ireland warned in the run up to the budget that, "With spiralling costs for hospitality businesses this is not the time to increase the 9% VAT".

Main image: A Dublin hotel room. Picture by: Alamy.com