32% of hotel beds outside Dublin being used to house refugees

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Some 32% of all hotel beds outside Dublin are now being used to house refugees, costing some €1bn in lost revenue for non-accommodation tourism, the Oireachtas Committee on Tourism has heard.

Some counties have more than 50% of all hotel accommodation now booked by the State for non-tourism purposes.

Eoghan O’Mara Walsh, CEO of the Irish Tourism Industry Confederation (ITIC), said losing so much supply would have a serious impact on price as demand and supply will be "completely out of sync".

“Imagine if Government removed a third of all cranes from construction sites? Or a third of all tractors from farms? In Donegal more than 50% of tourism beds are now contracted to the Government, and 39% in Co Clare or 37% in Co Kerry.

“Not only will this undoubtedly impact on the price of the remaining tourism beds but, worryingly, downstream tourism businesses — restaurants, attractions, inbound operators, activity providers — will miss out on the tourism dollar."

While tourism operators are prepared to play their part in addressing the current humanitarian crisis, they "cannot be asked to be the primary accommodation provider to the detriment of a broad industry", Mr O’Mara Walsh said. 

Eoghan O’Mara Walsh. Picture: Fennell Photography

"There needs to be a much more balanced approach to housing refugees including the use of vacant dwellings, unused buildings, state institutions as well as hotels and guest houses.” 

Supply constraints present a real risk for Irish tourism, Niall Gibbons, Chief Executive of Tourism Ireland, who is leaving his position there this week, said.

“The importance of overseas tourism cannot be overstated. 

"Before the pandemic, 2019 surpassed all previous records, when we welcomed 11.3m overseas visitors to the island of Ireland, who spent €5.9bn during their time here.

“Tourism was our largest indigenous industry, employing around 325,000 people across the island in 2019."

International travel rebounded more quickly than anticipated following the pandemic, with 2022 finishing at around 75% of 2019 business — ahead of competitor destinations, Mr Gibbons said.

Scheduled air seat capacity to the island of Ireland for June 2023 will be 102% of June 2019 levels, with almost 2.9m seats scheduled.

But securing adequate tourist accommodation is a major challenge this year. 

"We can see that demand overseas for holidays here this summer is strong and there is certainly optimism for the long-term health of overseas tourism. However, there are also challenges," he said.

Fáilte Ireland chief executive Paul Kelly said housing displaced Ukrainian citizens and international protection applicants in tourist accommodation is not a good solution for them or for tourism long-term.

And ringfencing so much hotel accommodation for non-tourism purposes is putting the survival of some downstream businesses at risk, Mr Kelly said.

“We estimate that this will cost the non-accommodation tourism sectors over €1bn in lost revenues this year. This will be a real loss as we know from inbound agents that many visitors who want to come to Ireland are now booking other countries simply because they cannot find accommodation in Ireland.” 

Price gouging, which has increased in frequency and scale in the accommodation sector, is damaging the sector’s reputation both nationally and internationally, he said.

But independent analysis showed that for the month of February, the average hotel room cost €150 in Dublin and €143 in the rest of the country. Although this is 26% above the same month in 2019, the industry has had to cope with significant inflation and shoulder higher energy, food, beverage and labour costs over that period.  

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