Tourism officials to warn Ministers on costs

State must end reliance on hotels for emergency accommodation and lift airport cap, industry confederation says

Tourism chiefs will seek to limit the use of hotels to house asylum seekers and an end to the Dublin Airport passenger cap at a meeting with the Government on Wednesday.

Representatives of the Irish Tourism Industry Confederation (ITIC) will meet Cabinet Ministers Simon Coveney and Catherine Martin to discuss rising costs and accommodation squeezes that are hitting their businesses.

The confederation wants the State to limit its use of hotels as emergency accommodation for Ukrainian refugees and asylum seekers, which it says has taken up 20 per cent of beds and costs the economy €1.1 billion a year.

Tourism will shoulder a “significant proportion” of the €4 billion bill on business for increasing the minimum wage, boosting employers’ pay-related social insurance and other measures due to come into force this year, the organisation warns.


Chairwoman Elaina Fitzgerald Kane said members feared the Government was imposing “too much too quickly” and wanted it to stall measures likely to increase labour costs, as they would either drive up prices or hit profits.

A 10-point plan for the industry that the confederation plans to present to both Ministers also calls for the expansion of Dublin Airport and an end to the 32 million year limit on passengers imposed there by planners.

Eoghan O’Mara Walsh, ITIC chief executive, maintained that a recent spate of hospitality closures showed the pressure that these businesses faced.

He added that the Republic had become “an extraordinarily expensive place to run a tourism business” particularly for smaller or medium-sized companies, while its recovery to pre-pandemic levels was still some way off.

Mr O’Mara Walsh argued that the State had to cut its reliance on hotels and guest houses for emergency accommodation, saying it had “hoovered up” one-fifth of rooms for this purpose.

“Imagine if the State took 20 per cent of cranes from building sites or 20 per cent of tractors from farms. This would have a profound effect on the construction sector and the agriculture sector,” he said.

Alongside these measures, the organisation wants the Government to restore the special 9 per cent VAT rate for hospitality, which now pays the standard 13.5 per cent.

Similarly, it wants flexibility on the May 1st deadline for the payment of tax that the Revenue did not collect during its Covid-era “warehousing” scheme.

Tourism businesses increasingly worry that Government-led cost increases, allied to the current limits on hotel and guest house room availability, are seriously damaging their competitiveness at a key time, says the confederation.

Members expect good numbers of North American tourists this year, but fear they will see fewer Irish, British or European holidaymakers over the summer as demand from those markets is slow.

The confederation recently argued that the Government had effectively forgotten tourism in Budget 2024, despite the fact that it is the Republic’s biggest home-grown industry and largest regional employer.

Last September, the confederation set out a strategy for tourism designed to grow the industry 50 per cent by 2030.

“The size of the prize is significant for businesses, employment and the exchequer, but success is predicated on pro-tourism policies from government,” said Mr O’Mara Walsh.

The confederation’s 10-point plan also calls for balanced regional development, a cautious approach to imposing planning regulations on short-term tourism rentals and a doubling of the €250 million business rates rebate scheme.s

Barry O'Halloran

Barry O'Halloran

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