Nearly one in seven hotel rooms in the state are currently reserved by the government to house refugees, exacerbating a supply crisis in the sector that has seen room rates rise significantly in recent months, leading to a significant political and public anger.
The Children’s Department, which is responsible for accommodating all refugees, confirmed to The Irish Times that the latest number of hotel rooms used to accommodate Ukrainian refugees is around 5,100, while 3 422 additional rooms are used to accommodate asylum seekers from other countries. countries that are in the direct delivery system.
That means 8,522 of the state’s 61,000 hotel rooms, or 14%, are currently off the market for tourists, business visitors and domestic residents. The number of hotel rooms that have been pulled from the private market is almost three times higher than the number of new rooms that are expected to be built over the next two years.
Representatives of the hospitality and tourism industries, along with state tourism officials, are due to appear before a committee of the Oireachtas on Wednesday, where the industry is expected to come under significant pressure from skyrocketing room rates this summer. , especially in Dublin and tourist hotspots such as Killarney. Typical room rates per night in Dublin exceed €400 most weekends.
Some politicians such as Fianna Fáil’s Timmy Dooley, who is not a member of the committee, have accused the hospitality industry of “price gouging” as travel demand rebounds from Covid. Tánaiste Leo Varadkar recently warned that rising room rates could cost the tourism industry any further extension of its special 9% VAT rate, which was previously 13.5%.
Many hoteliers have dismissed the ‘price gouging’ label and pointed to the capacity that has been taken out of the market for refugees, saying it has ‘distorted’ room rates. The Department of International Child Protection (Ipas) accommodation service pays flat rates for all capacity that has been taken out of circulation.
A hotelier who contacted the Irish Times, Charles O’Callaghan, the son of Noel O’Callaghan who set up the family’s eponymous hotel group which comprises four properties in Dublin, said he “can see how the consumer thinks the rates for some properties are too high.” He said there was “much more to it” than temporary reductions in supply due to refugees, and he also noted inflation in the supply chain. supply chain, hotels that have not reopened since the pandemic, unused capacity due to understaffing, and supply chain bottlenecks such as scarce linen supplies.
Ipas appears to have recently extended its block booking deals with many hotels as the state comes under huge pressure to house growing numbers of refugees. For example, earlier this year it block-booked the brand new €100 million, 393-room Travelodge Plus hotel in Dublin city center until this summer. However, availability on booking sites suggests the hotel is now block-booked until at least the end of this year.
At the Oireachtas committee meeting on Wednesday, the Irish Tourism Industry Confederation lobby group is expected to say that 2022 “cannot be considered a normal year”, and that “the escalating pressure on costs and lack of supply” have helped create pressure in the industry. .
The confederation will say that the latest STR research data suggests that room rates in April have only increased by 16% since before the pandemic. The latest data from the Central Bureau of Statistics suggests hotel rates in May rose 21% year-on-year. Anecdotally, room rates are increasing at a much faster rate this summer in areas with higher demand.