FINE Gael TD Olivia Mitchell has called for an investigation into serious allegations that banks are in effect keeping bankrupt “developer-hotels” functioning until NAMA can take them over.
Ms Mitchell, who is the party spokesperson on Arts, Sports and Tourism, has written to the Competition Authority on this issue that hoteliers argue is forcing them to the brink.
She has requested the authority carry out a full investigation to see if the banks and a range of developer hotels are “guilty of reckless trading and predatory pricing”.
In a statement issued last night Ms Mitchell referred to “persistent reports of banks pouring funds into non-viable developer owned hotels until NAMA takes over the loans”.
Those reports need be tackled and she said the Competition Authority was the vehicle to lead such a probe.
“Many of these tax incentivised hotels were never viable entities yet banks are artificially keeping them in business just long enough to get their huge loans transferred to NAMA, when they will become the taxpayers’ problem,” she said.
“The irony is that, because these hotels already owe the banks so much, they are kept afloat, while traditional owner-operated hotels, which could have a future, can’t get working capital.”
The result is that legitimate hoteliers are suffering from predatory pricing as developer hotels slash prices to stay afloat.
She has accused Tourism Minister Martin Cullen, of total ineptitude in the face of this scandal.
“The minister is sitting on his hands while the industry is haemorrhaging jobs and the greater worry is that NAMA will continue this policy of forbearance for non-compliant borrowers.
“I have written to the Competition Authority to investigate what distortion of competition issues this practice raises,” she said.
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