A report commissioned by Fáilte Ireland and conducted by Crowe Horwarth found that high hotel room rates in Dublin, often perceived as potential price gouging, are largely in line with international competitors and a result of surge pricing based on market conditions like supply, demand, and competition.
The report highlighted instances of headline-grabbing room rate hikes for major events like Taylor Swift’s concerts and during the Six Nations rugby tournament, but emphasised that the majority of rooms are sold well in advance at rates below last-minute pricing.
The high demand for hotel rooms during events is attributed to supply struggling to meet demand, leading to upward pressure on room rates, a scenario not unique to Dublin but common in major cities with limited stock during popular events.
The report cautioned against implementing price controls due to potential unintended consequences such as market distortion, reduced room supply, and decreased investment incentives, citing Ireland’s previous designation as the most expensive EU country for consumer services and second-most expensive for consumer goods before the pandemic. Barriers to growing supply included construction costs, funding, risk aversion, planning and hotel regulations.
Fáilte Ireland estimates that 2,500 short term let properties on platforms such as Airbnb and VRBO may be suitable for long-term rental after the short-term tourist letting bill is enacted. “It is likely these 2,500 units may leave the tourism sector and will no longer be available for use by tourists.”
In Dublin, 10pc of all Fáilte Ireland-registered stock, comprising 6,800 beds, is under government contract, while a further 9,100 beds are under contract in unregistered establishments. Ireland will likely need experience a shortfall of 11,500 hotel rooms over the next decade, with a shortfall in Dublin of 4,000 rooms.
