Costello calls on Dublin hotels to reverse exorbitant price increases

26 August 2015

by Cllr Joe Costello

The hospitality industry is getting greedy and is in danger of losing its way again as happened previously in the Celtic Tiger years.

Irish hotel and restaurant prices have been competitive in recent years, particularly after the current Government reduced the VAT rate for the hospitality industry from 13.5% to 9% to encourage more customers and better service. This is a move I have strongly supported and has proved a great success.

Irish tourism is now back to pre-2008 levels, with figures released by the CSO today showing a record increase of more than half a million visitors in the first half of 2015. A comparable second half of 2015 could bring Ireland to over eight million visitors for the first time ever.

More than 50% of all visitors access Dublin as a tourist attraction. The hospitality industry is booming in Dublin in 2015. That is why it is so disappointing to read on the international website Trivago that a double room in a Dublin hotel has increased by 28% in August 2015 compared to August 2014, making the Irish capital the ninth most expensive city in Europe.
Furthermore, according to a PwC report on hotels in European cities, Dublin is expected to top the Revenue per Available Room growth league in 2015 and 2016.

Moreover, the hotel occupancy rate in Dublin is forecast to be 80% in 2015. Greater bed occupancy means greater profits, which should enable hotel owners to reduce the room prices. Exorbitant prices will quickly undermine the tourist industry and threaten the recovering economy, which the CSO today stated is now creating more than 1,000 jobs per week.

If the hotel industry does not offer value for money, the Government should consider withdrawing the VAT concession introduced in 2011. It now behoves the industry to get its house in order and demonstrate in its forthcoming budget submission how it will comply with best pricing practice for the future.