Hotels must moderate prices increase or lose VAT concession

18 September 2015

by Cllr Joe Costello

The tourism figures published by the CSO for the first half of 2015 show that record levels of visitors came to Ireland in that six month period.

A total of 3.9 million tourists spent €2.35bn in Ireland from January to June.
The hospitality sector is going from strength to strength, and, if the trend continues, the country could exceed 8m visitors in one year for the first time in its history.

Dublin, in particular, is benefiting. Bed occupancy is projected to be over 80pc in 2015, and a recent PWC report expects Dublin to top the revenue per available room growth league of 50 European cities in 2015 and again in 2016.

Much of this growth has been fuelled by the reduction of the VAT rate on the hospitality sector from 13.5pc to 9pc. Despite the VAT reduction for the industry, the prices are now increasing sharply. Dublin is now the 9th most expensive capital in Europe and the price of a double room in a Dublin hotel has increased by 28pc in the 12 month period from August 2014 to August 2015.

This weekend is the biggest date in the GAA calendar, with the Dublin vs. Kerry showdown for the Sam Maguire Cup. Every hotel in the city is booked up, and the prices are grossly inflated. The industry will once more kill the golden goose as it threatened to do during the Celtic Tiger unless some constraints are imposed. Ireland’s economic recovery is fragile and exorbitant prices will quickly undermine the now growing tourist industry, which was stagnant until 2013.

Quite rightly, the Gardai are going to be out in force this weekend to catch the touts and scalpers who will be targeting Dublin and Kerry fans desperate to get tickets for the All Ireland final. But who will target the hoteliers, publicans and restaurateurs who will be ‘ripping off’ fans with exorbitant prices for their services?

It is time the hospitality industry moderate their prices or face the loss of the generous VAT concession they have enjoyed for the last four years.