MINISTER Patrick O’Donovan has issued a warning to hotel operators over soaring accommodation prices, accusing some of "robbing people" during major events.
The Minister for Arts, Culture and Sport criticised what he described as routine “price gouging” by hotels around concerts and festivals.
He warned that such practices are jeopardising potential tax relief for the sector in the upcoming budget.
O’Donovan likened the industry’s behaviour to “killing the goose that lays the golden egg”, warning hoteliers that aggressive pricing strategies could “cloud” government judgement ahead of proposed changes to the hospitality VAT rate, according to the Irish Independent.
VAT for the sector is expected to fall from 13.5% to 9%, a rate previously applied during the pandemic.
However, any reduction would primarily benefit food services and entertainment, not necessarily hotel accommodation.
Tourism Minister Peter Burke echoed O’Donovan’s concerns last month, slamming “extortionate” hotel prices in Dublin, particularly around large-scale events.
The practice of dynamic pricing, where room rates skyrocket due to high demand, has been singled out as damaging Ireland’s tourism image.
“This sends a bad message for Irish tourism,” Burke said. “It’s absolutely not acceptable.”
Taoiseach Micheál Martin and Finance Minister Paschal Donohoe have also said that only limited fiscal space remains for hospitality tax breaks, with most of the budget already committed.
Despite the criticism, the hotel industry has pushed back.
Irish Hotels Federation (IHF) president Michael Magner said while he does not defend excessive pricing, the majority of hoteliers charge fairly.
“Dynamic pricing is seen across industries, from airline tickets to advertising,” he noted, “But our sector is extremely transparent, perhaps too much so.”
Magner added that many hotels are still grappling with post-pandemic inflation.
“My costs are up 47% since 2019, while prices have risen just under 30%. I employ 150 people. The notion that we’re gouging customers across the board is unfair.”
The minister’s sharp rhetoric contrasts with his earlier position in April, when he opposed the idea of city-specific tourist taxes.
At the time, O’Donovan dismissed proposals from Dublin’s local authorities for a city levy, arguing such a move would burden tourists and drive them to stay in nearby counties like Wicklow or Kildare.
“The last thing we need is to be adding costs,” he said in an RTÉ interview, calling any such tax “counterproductive for the Dublin tourism industry.”
There appears to a bit of a contradiction in O’Donovan’s stance: vehemently opposing added levies in the spring while now urging the sector to lower prices or risk losing out on government support.
However, the minister maintains his position is consistent: opposing unnecessary taxes while demanding fair pricing from an industry benefiting from substantial public support and subsidies.
O’Donovan offered a final warning: “If this is an industry that wants to be protected, supported, and marketed by the Government, then it’s a two-way street. Don’t expect help if you’re going to fleece people.”
The budget is expected to be announced next month.
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