Tanaist Leo Varadkar has directly warned the Irish hospitality industry that any evidence of rising prices could lead the government to decide to restore a higher VAT rate for the sector in 2023.
The warning came at a time when Mr Varadkar dismissed speculation that Ireland’s humanitarian response to the war in Ukraine had led to rising hotel and holiday prices.
Domestic and foreign vacationers have complained in recent weeks about rising hotel prices.
Even Kerry’s drivers decided to return to Tralee tonight for the McDon Cup final in Croc Park due to a lack of available hotel rooms in Dublin.
Mr Varadkar said it was a power problem as the world felt a surge in travel after the Covid-19 pandemic.
“There is a shortage of hotels in Ireland, especially in Dublin and our cities, and I don’t think the reason is that we accept so many people from Ukraine – it’s only about 5% in Dublin and 9% across the country.” he said.
“It would be unfair to link all this to the war in Ukraine – there is a general shortage of hotels in Ireland. Not so long ago, people said we shouldn’t build any new hotels in Dublin – they were wrong. “
Mr Varadkar said providing additional hotels is now a strategic imperative.
“It’s important that we continue to increase the supply of hotels across the country – although some of them – are a pandemic phenomenon of falling demand.”
Tánaiste has warned the hospitality sector against overcharging after numerous complaints from domestic and foreign visitors about the scale of the recent price spiral.
One woman told how due to a three-day stay at a Dublin hotel she could get five nights in Italy with flights and transfers.
“One thing I would like to say to hoteliers – it may be a lack of places and accommodation in your hotels, but do not overestimate the rates,” – said Mr. Varadkar.
“The government has decided not to increase the VAT rate by 9 percent – if we look at it again next year, we do not want to increase it again, and how we treat customers will be a factor that we will take into account,” he said. he.
“Also keep in mind what happened 10 or 15 years ago when the Irish tourism industry gained a bad reputation internationally for inflated fares, a few years later a price was paid for it.
“Perhaps in the long run you can make more profit if you don’t have such high prices and treat people fairly.”
