Hotels to raise prices despite VAT concession, say politicians

Tourist industry is accused of trying to have it both ways

Hotels plan to increase room charges despite winning a VAT concession from Government, politicians claimed on Wednesday.

Addressing industry chiefs at the Oireachtas Tourism Committee, Senator Shane Cassells accused them of changing their tune on prices since convincing the Government to keep the special 9 per cent VAT rate for hospitality. “You’re making the point now that prices are going to go up regardless of the fact that we kept VAT at 9 per cent, but that’s not going to have any impact on the industry,” he said.

Senator Cassells pointed out that when industry figures last appeared at the committee they warned that increasing VAT would boost prices and damage competitiveness.

He added that the industry was now saying prices would increase irrespective of the VAT concession. “You cannot have it both ways,” the Senator said.


Christopher O’Sullivan said reports of Dublin hotels price gouging over St Patrick’s weekend were “an up yours” to his Fianna Fáil party colleague Minister for Finance Michael McGrath.

Answering Senator Cassells, Eoghan O’Mara Walsh, chief executive of the Irish Tourism Industry Council, said most businesses would charge fair and reasonable rates. “One third of tourism beds are out of stock; our concern is that it will lead to upward increases in prices,” he said.

Mr O’Mara Walsh argued that there was a difference between price and value. “As long as we keep our value proposition we will be okay.”

Earlier he told the committee that hoteliers had supplied 32 per cent of beds outside Dublin to accommodate Government refugees. “Not only will this undoubtedly impact on the price of the remaining tourism beds but, worryingly, downstream tourism businesses – restaurants, attractions, inbound operators, activity providers – will miss out on the tourism dollar.”

He noted that last month hotel rooms cost €143 a day, rising to €150 in Dublin.

Niall Gibbons, chief executive of State body Tourism Ireland, warned the committee that Britain’s proposed electronic travel authorisation system threatened cross-Border travel. He pointed out that 70 per cent of tourists travelling to Northern Ireland arrive in the Republic. The new rules will require them to have electronic authorisation to cross the Border if they are not British or Irish. “It has the capacity to disrupt a lot of the progress we have made,” Mr Gibbons told the committee.

Tourism Ireland is charged with selling the entire country – North and South – as a holiday destination. Industry bodies want the Government to pressure the British into exempting holiday-makers.

Meanwhile, a group representing people who rent properties or rooms to tourists for short periods protested at proposals to force them to seek planning permission for this. The EU has ordered the Government to stall the proposals until December. The new rules would require short-term accommodation providers to seek planning permission and register their properties.

Save our Short Term Rents says the planning permission requirement lacks clarity, while proposed eligibility criteria are not defined.

The group acknowledges the need for registration and that the current housing crisis means the State must maximise long-term rental opportunities. However, it warns the proposals as they stand will hit small operators in rural Ireland and extinguish opportunities for women in small communities to find work.

Barry O'Halloran

Barry O'Halloran

Barry O’Halloran covers energy, construction, insolvency, and gaming and betting, among other areas