Self-catering accommodation squeeze hits tourists and investors, industry warns

A squeeze on short-term self-catering accommodation is hitting tourism and potentially foreign investment, an industry body has said. Tourism figures fear new laws that would require planning permission for self-catering accommodation will lead to a further shortage of beds for holidaymakers at a time when hotels are already under pressure.

Máire Ní Mhurchú, chairwoman of the Irish Self-Catering Federation, said the current shortage risks spreading to multinational investors, which often need short-term accommodation for managers or staff working temporarily in the Republic. She said an executive from one US company recently told her his business would not base itself in the Republic as “there was no short-term accommodation available in Dublin”.

Ms Ní Mhurchú added that she also knew of one US university that cancelled a student trip to the Republic as staff due to come here to prepare in advance were unable to find anywhere to stay.

IDA Ireland, the agency charged with luring overseas job-creating investment to the Republic, acknowledged that the issue was “a challenge, but not a deterrent”. A spokesman said client companies do raise the Republic’s general housing and accommodation shortages along with other issues. “But once they see a government plan in place to resolve the problem they accept that,” he added.

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He noted the Republic was not the only developed country currently grappling with housing and accommodation problems.

The Irish Self-Catering Federation believes new rules requiring planning permission for self-catering homes will simply push people out of the business permanently. Its most recent policy paper points out that some businesses did not reopen after Covid forced their closure four years ago.

Ms Ní Mhurchú said her organisation favours regulation. It developed a quality assurance scheme that State tourism agency Fáilte Ireland has approved, while the federation supports moves to introduce a register of self-catering tourist homes. “There needs to be controls and there needs to be regulations, but we need a balanced tourism policy too,” she says.

It wants the proposed legislation to demand that future self-catering accommodation gets planning permission while allowing existing businesses to continue without it. The federation’s chairwoman points out that when the UK introduced new planning rules for short-term lets it allowed councils to automatically reclassify existing businesses.

According to Ms Ní Mhurchú, demand for self-catering accommodation stretches beyond tourists to mobile workers, people who have to travel for long-term medical treatment, and business people.

Asylum seekers and refugees occupy large numbers of hotel beds in traditional tourist areas to allow the State meet humanitarian commitments. The Irish Self-Catering Federation estimated that one in five beds were used for this purpose nationally during the 2023 tourist season. That figure rose to 28 per cent in Clare, Galway and Kerry last year, the group calculated.

Its policy paper says “the majority” of mid-priced hotel beds in the Republic were not available to tourists last year. “In places like Co Clare there is a huge number of beds gone,” said Ms Ní Mhurchú.

The Irish Tourism Industry Confederation said increased social insurance, VAT and wage costs, all driven by Government policy, threaten to close many hospitality businesses.