According to the Irish Hotels Federation, Dublin hoteliers are concerned for the 2023 economic outlook as future bookings have dropped significantly.

Despite an increase in business during 2022 following Covid-19 restrictions, overall room occupancy rates are down by nearly ten per cent compared to the same period in 2019.

Average occupancy rates between January and October stood at 71 per cent nationally and 75 per cent in Dublin, a new survey of Irish Hotels Federation (IHF) members found. It is unclear if this figure takes into account rooms being used as emergency accommodation.

“Spiralling” business costs, reduced bookings, and a planned increase in the tourism VAT rate at the end of February 2023 are all piling pressure on the Irish tourist industry, according to the IHF.

Energy costs are now running at a tenth of total revenue for the average hotel, said IHF CEO Denyse Campbell: “For an average 70-bedroom hotel this means an increase of €380,000 in annual energy costs.”

Looks like hotels aren’t recession-proof after all.

During the pandemic, the Government reduced the VAT rate for the hospitality and tourism sectors to nine per cent to help aid the industry. In February, the rate will return to 13.5 per cent.

“Consumers and overseas visitors will be paying the third highest tourism VAT rate in Europe,” said Campbell.

“We have done really well to rebuild employment levels in the tourism industry back to 90 per cent of the pre-pandemic level,” she added. “We should now be seeking to restore and grow tourism, and not undermine it with a VAT rate hike.”

The Dublin hotel industry is no stranger to criticism – during the summer there was uproar when Dublin City Council approved the demolition of a beer garden to develop a six-storey hotel extension for The Holiday Inn Express. A protest was subsequently held in August.

In October, it was reported that up to one in seven Irish hotels are being used to house refugees and asylum seekers. This figure does not include hotels being used for emergency homeless accommodation.

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