Shares in Dalata fell around 2.5% as it warned that hiking the 9% Vat rate could reduce group revenues by up to 2% for the year.
Profits in the country’s largest hotel group rose 8.3%, to €35.4m, in the six months to June 30 on revenues that were up 10.6% to €180.6m.
The 9% Vat rate is “hugely positive” for the hospitality industry and regional economies and should not be raised, said deputy chief executive Dermot Crowley.
He rejected criticism of the hotel industry inflating prices around big events such as concerts and sporting occasions, saying Dalata offers “really good value” for the likes of business travellers, airline crews and coach tourists, especially in the off-season months.
Funds raised in recent years have been pumped back into the Irish regional economy through hotel building and labour, he said.
“We are creating hundreds of jobs and investing heavily in regional Ireland,” said Mr Crowley.
Dalata said average revenue per room was up over 7% from the same period in 2017 to over €89, while occupancy was at more than 82%.
The firm said it signed an agreement to lease a 276-room Maldron Hotel to be built in the centre of Manchester.
Mr Crowley said it is “actively looking at Germany” as it eyes expansion into Europe, but that further investment in Ireland and Britain is a main focus.
While its recent foray into London marked a departure from its building up of hotels in the British regions, Mr Crowley said this would only be repeated with exceptional opportunities.
Its €100m hotel purchase at Aldgate in London was a largely unique opportunity, and it was easier to roll out its strategy in the regions, he said.