Eoghan O'Mara Walsh: Government must tread very carefully with short term letting legislation

'Such a policy would devastate tourism towns from Westport to Killarney to Kinsale,' writes Mr O'Mara Walsh.

With the hospitality Vat rate rise last year and a spending cut this year, recent decisions from the Government have not been kind to the Irish tourism industry.

And if the Government wants to avoid causing further damage, then it needs to have a serious conversation about impending short term rental legislation that risk decimating self-catering properties and Airbnbs right around the country.

Ireland’s tourism industry is already facing into 2024 with a certain degree of apprehension. Escalating costs of business allied to significant capacity concerns mean that the year ahead will be a challenging one. 

Demand signals may be strong from the key North American visitor, but other markets across Europe and Britain are likely to be much softer.

Cost, capacity, and competitiveness are the three main concerns for Ireland’s tourism industry, the country’s largest indigenous sector and biggest regional employer. 

It has been estimated that the combined effect of labour legislation this year will cost Irish businesses a whopping €4bn while capacity crunches.

In this context, the Government must tread very carefully with their impending short-term tourism letting legislation.

A “one-size-fits-all” approach, as currently envisaged, risks denuding the country of self-catering tourism properties at the very time that it needs them the most.

Latest available annual data from the Central Statistics Office shows that 11 million bed nights were spent by tourists in “renting apartments or houses” — this demonstrates the vital importance of the sector to the tourism economy and particularly so to regional Ireland.

As a matter of urgency, the Government must engage openly and constructively with tourism stakeholders in creating a short-term-letting system that is fit for purpose.

Short-term lets monitored

It has been welcomed by all in the tourism industry — from large online booking platforms to small property owners — that a register of short-term tourism lettings is coming into effect and is to be managed by Fáilte Ireland. This gives transparency and regulation to a sector that for too long has operated in a grey zone.

However, it is the potentially onerous planning conditions required to be on the register that are causing tourism leaders great concern. 

After lengthy calls from a frustrated industry, draft guiding principles for planning authorities were finally published by the Department of Housing late last year but they have caused more confusion than clarity for property owners.

It seems that all short-term tourism rental properties will need to apply for planning permission, a new requirement, to continue trading but only planning authorities “in rural locations will be allowed consider if it would be reasonable” to allow for a change of use.

Such vague language immediately set off alarm bells. Discretion by its nature is imprecise and risks clientelism and inconsistent decision making.

And what is a “rural” local authority anyway and does this not imply that planning will not be granted for short term tourism letting in “urban” local authority areas including tourism hotspot cities like Kilkenny, Galway, or Cork?

Government is trying to increase the supply of long-term rental properties to ease the housing crisis, and this is something nobody can argue with. 

But at the same time it has committed to getting the balance right between housing and the needs of the tourism sector — it seems currently that the pendulum is set to swing too far away from the latter.

Research shows that many owners that rent their self-catering property out for a few weeks a year are not going to put them on the long-term rental market. Such a policy would devastate tourism towns from Westport to Killarney to Kinsale.

Unless the government takes an open-minded and fact-based approach to the delivery of tourism accommodation services, the potential remains that significant damage will be done to the sector.

We are now only a matter of weeks before legislation is once again introduced in the Oireachtas to set up a registration system for short term lets. 

But there is still no clarity as to what’s in store for owners or operators under the new scheme. 

Customers are nervous about making bookings beyond this summer and owners are afraid to invest for fear of being forced to cease trading. 

That is no way to treat a crucial part of our tourism industry or the families and people working in it.

Eoghan O’Mara Walsh, is CEO Irish Tourism Industry Confederation