'Significant increases' in cost of hotel rooms to continue next year, Fáilte Ireland warns
During the summer, high hotel room rates during busy events such as the GAA fixtures received widespread coverage in the media.
Fáilte Ireland has warned that "significant increases" in the cost of hotel rooms are set to continue well into 2023.
The warning comes as it was revealed that the head of the tourist body has written to providers, accusing them of causing reputational damage to the industry by charging sky-high prices for hotel rooms “to squeeze the last few euros” out of consumers.
During the summer, events such as big GAA fixtures and concerts such as Garth Brooks in Croke Park generated significant media coverage for the very high rates being charged by some hotels in Dublin on those nights.
The Oireachtas Tourism Committee heard industry officials also flagged concern around the impact on tourism from high occupancy rates of Ukrainians and international protection applicants in hotels.
Fáilte Ireland CEO Paul Kelly, who warned about the price increases continuing next year, said that hotel room price spikes that were widely reported on had caused reputation damage to the sector in Ireland, and damage to Ireland’s reputation globally for offering value for money.
“The reputational damage of high pricing on small rooms is not worth the extra revenue that they generate,” Mr Kelly said.
“That’s the context I’m writing [to hotels], to remind them to try not squeeze the last few euro out of those last few rooms.”
Mr Kelly said the letter was about reminding them “that we know from bitter experience if Ireland's reputation as a good-value destination is damaged, it will take many years to recover”.
Both the Irish Hotels Federation and the Irish Tourism Industry Confederation told the committee that instances where very high prices were being charged by hotels were not the norm and only came when occupancy levels were “very high” in the likes of Dublin.
Irish Hotels Federation CEO Tim Fenn said there had been prices “that people would’ve been unhappy with” but said it’s disappointing that all the industry seemed to have presented “in the same light”.
Irish Tourism Industry Confederation CEO Eoghan O’Mara Walsh said that the best way to moderate prices is competition, and that the industry will have a “real, real problem” next year if the Government looks to increase the amount of beds in the sector being used for refugees.
Currently, 22% of the tourism beds nationally are contracted out to the Government. This rises to 35% in Kerry and to over 50% in Donegal, according to Mr O’Mara Walsh.
“The Killarneys and the Wesports of this world,” he said. “If you don’t have the bed stock, you don’t have the tourism activity, and livelihoods are at risk.”
He said that the knock-on effect for less tourism activity in an area would impact cafes, bars, restaurants, and other businesses reliant on such footfall.
“It makes for alarming reading from a tourism perspective,” he said.
“Unless there’s a real, proper comprehensive plan in this regard, more and more tourism beds will get sucked into this system.”
The committee heard that it’s mostly three-star hotels that are being used for the accommodation of refugees, which was taking lower-cost options out of the system, and that the Government only has a few months until the traditional summer season starts in March to address the major shortfalls in alternative accommodation for refugees.
“We’re storing up huge problems,” Mr O’Mara Walsh added. “We’re sleepwalking into a tourism crisis next summer.”
The committee also heard that it may be attractive for more rural hotels unused to full occupancy to take up the offer of having full occupancy at a higher-than-usual rate under a Government contract to accommodate refugees.
Committee chair, and Fianna Fáil TD, Niamh Smyth said that the issues outlined represented a “crisis in the tourism sector” and that if they aren’t addressed “we’ll be setting ourselves back 10 years” as far as tourism is concerned.
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