Doubling hotel levy in Dublin 'sends wrong signal' - IHF

A move by Dublin City Council to double the development levy on the construction of new hotels, hostels and aparthotels has been criticised by the Irish Hotels Federation.

Last week, the local authority decided to increase the levy to €244 per square metre.

It is expected that for a development of 20,000 square metres, the charge will increase from €2.5 million to €5m.

Dublin City Council's revised contribution scheme, which was agreed on 8 June, includes a change which said that hotels, tourist hostels and aparthotels will be "charged at twice the commercial rate".

The new rate will apply from 1 July.

In a statement to RTÉ News, the Irish Hotels Federation chief executive Paul Gallagher said the doubling of the charge "sends the wrong signal at the worst possible time".

He added that the cost of delivering new hotel capacity was "already prohibitive and projects right across the country are stalled as a result".

In March, Green Party councillors called for the inclusion of a doubling of the development contribution on hotels as part of the revised scheme between 2026 and 2029.

Green councillor Michael Pidgeon said last night that by making the construction of hotels more expensive, it would "direct more money towards house building".

However, the Irish Hotels Federation said analysis prepared for the tourism industry this year pointed to a national shortfall of between 10,000 and 15,000 hotel bedrooms by 2031.

It said Dublin was the arrival point for most overseas visitors before they travel around Ireland, and constrained hotel investment had implications for tourism nationally.

Mr Gallagher said: "If we are serious about meeting our national tourism targets, it makes no sense to double a major upfront charge on the very accommodation those targets depend on."