Planned 9.8% increase in non-domestic water charges undermining viability of hotels, says IHF
Michael Magner, the
IHF
president, described the increase as 'yet another example of the relentless increases in operating costs that are eroding Irish competitiveness and undermining the viability of businesses.'
The new water and wastewater tariff rates will be effective from October 1st. The move is to 'ensure the recovery of costs of water services' and would aide 'the reliability, efficiency and sustainability of water services,' the CRU said.
The decision to increase all charges by the same percentage value was made in the hopes of 'retaining the equity of cost allocation in the 2024 tariffs for all customer types' the CRU said in the decision published on Monday.
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The IHF president said that, over the past two years, the average 70-bedroom hotel in Ireland will have seen an increase of over 40 per cent in its water tariffs.
He said the increase is 'unsustainable given the exceptionally challenging environment' for Irish hotels. 'As a big consumer of water services, the hospitality sector is disproportionately impacted by increases in water tariffs, which businesses are unable to absorb.'
Mr Magner said the 'cumulative impact of these and other cost increases now poses a serious threat to the viability of many businesses through our wider tourism and hospitality sector.'
He said the sector is concerned about potential future annual increases over the next four years and the 'ongoing transfer of unjustifiable costs arising from inefficiencies in the delivery of water services in Ireland' while calling for a 'fairer funding model' to sustain water services and cost competitiveness for businesses.'
Uisce Eireann had originally suggested a 13 per cent increase in charges to the CRU, which decides the rate, alongside two alternative increases of 1.7 per cent – in line with the harmonised index of consumer prices for 2025 – and 6.9 per cent – the average growth in Uisce Eireann's approved allowed revenues from 2020 to 2024.
During a consultation period on the decision, the CRU received 22 submissions which opposed any increase but it noted that while 'affordability and competitiveness are significant issues for non-domestic customers and the Irish economy', Uisce Eireann is required to run in a 'commercially viable manner'.
The regulator noted the increase was 'similar, or lower than' increases in similar percentage increases in UK water utilities.
In light of the submissions received, the CRU said the 9.8 per cent increase was 'the most balanced approach'.
'The CRU is aware of the impact of bill increases for certain non-domestic customers and has engaged with Uisce Éireann to ensure that there are measures in place when engaging with customers with financial difficulties.'
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