Hotels overcharging could risk a return to higher Vat rate, warns Varadkar

Tánaiste Leo Varadkar said more hotels are needed around the country. Picture: Damien Storan/PA 

The Tánaiste has warned hoteliers that overcharging for accommodation could risk a return to a higher Vat rate.

Leo Varadkar acknowledged that while the tourism sector has had “a very tough few years”, it is important to treat consumers well.

In recent days, a number of instances of high prices, in particular in Dublin, have been shared on social media.

“One thing I would say to hoteliers is, while there might be a shortage of accommodation and space in your hotels, don’t engage in overcharging,” Mr Varadkar said on a visit to Cork.

“The Government took a decision not to put the 9% Vat rate back up. When it comes to that again next year, we don’t want to have to put it up again.

How customers are treated will be a factor we take into consideration.

“I don’t want Ireland to get a reputation for being an expensive place to visit, as it did in the past. There’s a cost to be paid for that.

“It’s better to think long term, and perhaps there are more profits to be made long-term in not having such high prices and treating people fairly.” 

Mr Varadkar acknowledged hotel prices are high and that there is a shortage of hotels, particularly in Dublin and other cities.

Refugees 'not causing the shortage'

But he rubbished claims that Ukrainian refugees fleeing war were causing the shortage, with only approximately 5% being accommodated in Dublin and 9% of hotels around the country being used for refugees.

“It wouldn’t be fair to blame it on the war in Ukraine. There is a shortage of hotel accommodation in Ireland.

"It wasn’t that long ago that people said we shouldn’t build any new hotels in Dublin; they were wrong. It is important that we increase supply of hotels around the country.” 

Part of the pressure is from demand “snapping back” post-pandemic as people are travelling again and concerts and events are on.