The 1,500 new hotel rooms planned for Cork could be too much for the market to bear, the Irish Hotels Federation (IHF) has said.

Hoteliers have defended the €626m-a-year cost to the exchequer of retaining the low, 9% Vat level for hospitality, saying the buoyancy in tax revenues from the additional jobs and business is making up for the lost tax revenue.

Dublin hotels had the highest occupancy in Europe in 2016 and are forecast to stay on top in 2017 and 2018, according to a report.

The former owners of the five-star Intercontinental Hotel in Dublin last year paid €2m in order to terminate its operating agreement with Four Seasons.