The doubling of the hotel development levy in Dublin city will hurt efforts to meet the State’s tourism targets, the Irish Hotels Federation (IHF) has said.
The move, agreed by Dublin City Council at a recent meeting and taking effect from July 1st, will increase the development levy on new hotels, hostels and aparthotels to €244 per square metre.
The IHF said the move would raise the charge for a development of about 20,000sq m from roughly €2.5 million to €5 million.
The move follows a backlash against the proliferation of new hotels in Dublin in recent years, with such developments often categorised as coming at the expense of housing projects or cultural amenities.
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However, IHF chief executive Paul Gallagher said the doubling of the levy “sends the wrong signal at the worst possible time”.
“The cost of delivering new hotel capacity is already prohibitive, and projects right across the country are stalled as a result,” he said.
“Loading millions of euro more on to the upfront cost of development in our main gateway city will hold back the very investment required to deliver national tourism policy targets.”
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The IHF said the decision came as the economics of hotel development were under “significant pressure”.
Research by the IHF published earlier this year found 45 per cent of hotel businesses with plans to add guest rooms claimed those projects were on hold due to construction costs, access to finance, planning delays and slow utility connections.
The National Tourism Policy Statement, published in December, sets a target to grow overseas tourism revenue to €9 billion by 2031, representing a 50 per cent increase on 2024.
“Doubling the development charge on new hotels pulls in the opposite direction, making the additional capacity harder and more expensive to deliver,” said Gallagher.
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“Dublin is the arrival point for most overseas visitors before they travel on around the country, so a measure that constrains hotel investment in the capital carries consequences for tourism and employment nationally, not only in the city.
“We want to work with Dublin City Council and with Government to grow tourism in a way that benefits both the city and the country.
“If we are serious about meeting our national tourism targets, it makes no sense to double a major upfront charge on the very accommodation those targets depend on.
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“We are urging the council to reconsider an increase that works against national policy and against Dublin’s own long-term interest as a destination.”
The IHF is the national organisation of the hotel and guesthouse sector in Ireland. It represents more than 900 hotels and guesthouses nationwide, employing more than 69,000 people, and is a key stakeholder in the Irish tourism industry.
