THE IRISH HOTELS FEDERATION has defended the industry against accusations of ‘price gouging’, saying there are “misperceptions” around rising prices. 

It said hotels, particularly in Dublin, are seeing exceptional levels of advance bookings this summer as tourism has rebounded “much faster” from the pandemic than anticipated.  

The representative body was before the Oireacthas Joint Committee on Tourism, Culture, Arts Sport and Media this afternoon, following reports of inflated costs and profiteering by the sector.

It pointed to analysis reporting that around 80% of available Dublin hotel rooms for the month of June had already been booked in advance by the end of May, an increase on pre-pandemic levels in 2019, when the advance bookings for June stood at 65% by the end of May.

The combined effect of these is that there are now more nights where occupancy in Dublin exceeds 90% and the last available rooms are quoted at rates in excess of the average, the IHF said.

“This has given rise to significant levels of media and political commentary and misperceptions around the overall value for money in the market in Dublin, which remains competitive with our European peers,” Tim Fenn, IHF chief executive, said.

“What is often lost in this commentary is that the vast majority of rooms currently sold have been contracted and previously booked well in advance at rates significantly below the last available rates.”

However Fenn said the group expects it to be a short-term disruption to the market, which can resolve itself as pent-up demand eases and additional hotel room stock comes on stream.

He added that the high demand in Dublin coincided “with an unprecedented reduction in Dublin hotel room stock” that would otherwise be available to supply tourism accommodation.

“As a result, many hotels are nearing full capacity on busy days earlier than in previous years,” he said.

Fenn continued: “The recovery is being fuelled by very significant levels of pent-up consumer demand – both domestically and internationally.

“At the same time, many Dublin hotels are managing unprecedented levels of displaced business including group bookings that had been previously contracted back in 2020 and 2021.” 

The IHF said the capital had the highest occupancy rate of any city in Europe at 83.6%, up from 18.3% in 2021. The average daily rate (ADR) for a hotel room was €154.31 behind Amsterdam, Rome and London.

This average rate was up 16.5% on April 2019 but comes at a time when hotels are reporting increasing operational costs, with year-on-year increases of 88% in energy, 18% in food and beverage supplies, over 30% in linen services and 20% in insurance costs.

In terms of supply, Dublin has 22,492 hotel and guesthouse rooms registered with Fáilte Ireland. The IHF estimates that 18,533 (82.4%) of these are operating as hotel accommodation at present.

“The remaining 17.6% of rooms relate to Government contracted business and rooms out of service due to reduced staffing levels, staff accommodation allocations, supplier issues and refurbishment projects,” the group said in its statement to the Oireachtas committee.