Time for the hotel industry to moderate prices-Costello
1 September 2016
The hotel industry must moderate prices or face the loss of the special concession it has enjoyed since 2011, according to Joe Costello.
"The most recent study of Accounting and Advisory firm Crowe and Howarth found that profits per hotel room were up by almost 30% in 2015 across the country.
"This is even higher than the figures recently provided by the Data Analytics specialists STR of 19.3% increase in the average daily rate of a hotel room in Dublin between mid-2015 and mid-2016 and the figures recently supplied by Price Waterhouse Cooper (PWC) of a 23.3% increase in 2015. What is different in the recent figures is that Crowe and Howarth survey is the 21st annual survey of the hotel industry and therefore is the reliable tracking study. Also it gives the lie to the argument that only Dublin hotels have benefited from the boom in tourism.
"These are national figures and while Dublin does very well, the hotel industry across the country has also been doing very well. Indeed, the Midlands and East of the country excluding Dublin have experienced the sharpest increase of 40%.
"This weekend and the third weekend in September are the biggest dates in the GAA calendar with the Kilkenny and Tipperary showdown in hurling and the Dublin v Mayo final in football. Every hotel room in the City will be booked up, many with grossly inflated prices.
"The hospitality industry has now reached peak Celtic Tiger levels. It will once more kill the golden goose unless some constraints are imposed. Ireland’s economic recovery is fragile and exorbitant prices will quickly undermine the now rapidly growing tourist industry which was on a stagnant or downward trend until 2013.
"In the context of the forthcoming budget the Government must decide whether it can continue to grant the hospitality sector a reduction in VAT from 13.5% to 9%. The €600 to €700 million that the Exchequer foregoes annually might be better spent on essential services."