HOTELIERS TOLD: DO NOT PRICE-GOUGE
With reports of rooms doubling in price for Bloom, minister warns that the goodwill VAT-freeze for businesses is a ‘two-way street’
HOTELS have been warned not to price-gouge customers with ‘astronomical’ rates as the cost of living soars, along with the price of staycations.
With some hotels having doubled their rates for the upcoming June Bank Holiday weekend, one minister has reminded the industry of the recent VAT-rate freeze and that goodwill is a ‘two-way street’.
Hoteliers have been told that having room rates ‘balloon out of control’ for every holiday or major event risks damaging the reputation of the Irish tourism industry, and that the State’s support of the sector during the pandemic
should be ‘reciprocated’.
But hoteliers have told the Irish Daily Mail that while the 9% VATrate freeze is welcome, in some cases they have to increase prices because inflation is now at a record 22-year high of 7% and set to climb even further.
However, with the cost-of-living crisis permeating all elements of life, such complaints are falling on deaf ears. Junior Minister Patrick O’Donovan said his office has received calls with people reporting soaring hotel prices with rates increasing by 200% to 300% from a Thursday to a Sunday, while other TDs have complained of seeing
‘Prices balloon out of control’
‘crazy and ridiculous’ prices that have doubled in recent weeks.
While a one-night stay in Dublin this weekend costs some €200 per night, depending on the hotel, for the upcoming June Bank Holiday weekend – as the Bord Bia Bloom festival returns – the cost jumps to some €400 per night for one room.
And hotels in the capital have already begun hiking their prices for St Patrick’s Day 2023.
Mr O’Donovan, Junior Minister with responsibility for the Office of Public Works, warned that price-gouging in popular holiday hotspots around the country will not help future attempts at keeping the VAT rate low.
He said yesterday: ‘Dublin hotel prices balloon out of control every time there is a concert. We can’t have that, because we are investing on behalf of the people of Ireland through a reduction in VAT, so this is a twoway street.
‘We need to make sure that we are sending out a strong signal to our domestic tourism industry in the first place, and then internationally, that while we are investing in the industry we expect that that will be reciprocated.’
Fianna Fáil Senator Timmy Dooley told the Irish Daily Mail last night: ‘I just feel that Irish hotels got a lot of support from the taxpayer through the pandemic, which was the right thing to do, and I was disappointed to see that some of them seem to be pushing up prices to a level that is not sustainable.
‘They are at the upper end of the European scale and Dublin seems to be out of kilter with other cities like Berlin and Paris. Some of this has to do with the fact that many hotels are accommodating Ukrainian citizens so occupancy is high, but I think some hotels are price-gouging.
‘I am concerned that this will damage not only domestic tourism but also the image of Ireland abroad, if they charge astronomical prices.’
Senator Dooley earlier described the hotel sector’s current approach to regaining profits as ‘price-gouging’.
Speaking in the Oireachtas, he said the cost of a two-night stay in a Dublin hotel is nearly twice that of other European countries.
‘If you look at for the next weekend, for two nights, Friday and Saturday night, it’s over €700 for two nights for two people in a four-star hotel in this city,’ Mr Dooley said. ‘I did some comparisons with Berlin, it’d be €300, Paris about €450, London €500, and Lisbon €300. In 2019, the average price for a room in Dublin was approximately €150 per night.’
Carlow councillor Tom O’Neill told the Irish Daily Mail: ‘We know the tourism industry is having a tough two years there’s no question about that but the prices they are charging now to me is just ridiculous.
‘They’re just outpricing the ordinary man and woman... I certainly think we are overcharging.’
Fianna Fáil’s tourism spokesman Cathal Crowe told the Irish Daily Mail that he has also been made aware of hotel prices ‘doubling’. He said: ‘It’s not even inflation linked. In some instances, I’ve seen prices double in the space of a week, and that totally outruns where inflation levels are at. I think that’s maybe taking advantage of markets at this time.’
But Pádraig McGillicuddy, owner and manager of the Ballygarry House hotel and spa near Tralee, said he was not aware of any price increases in the Kerry area which were ‘out of the ordinary’.
He said: ‘The 9% VAT rate is very much welcomed, and will be an advantage to us in terms of keeping prices low and competing against mainland Europe.’
He forecast that prices would have to rise gradually to account for the rising costs faced by the hotel industry. These included a doubling of energy prices, a 30% increase in linen charges, food prices rising by 30% and beverages by 10%, he said.
‘Everything has gone up, so there will have to be organic price increases with that, but there is no surge in prices for the bank holiday weekend.’
Mr McGillicuddy said hotels would adjust their prices in line with supply and demand, but he added: ‘It is often sensationalised – people pick out a price for a standard room on one date, and compare it with a suite on another date. That is like comparing apples with oranges.’
Neil Lucey, owner and manager of the Gougane Barra Hotel in west Cork, said his hotel had only increased its price by 5% over the last three years.
He said he was aware of large corporate chain hotels bumping up their prices at busy times, to recoup losses suffered during Covid restrictions.
However, he said his hotel catered for regular, repeat customers, who had to be respected and who might not return if prices suddenly skyrocketed.
‘Everything has gone up’