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

Dublin City Council's decision to double the development levy on new hotels, hostels, and aparthotels has drawn sharp criticism from the Irish Hotels Federation (IHF). The local authority increased the levy to €244 per square meter, meaning a 20,000 square meter development could now face a charge of €5 million, up from €2.5 million.

“

sends the wrong signal at the worst possible time

This revised contribution scheme, effective July 1, charges hotels at twice the commercial rate. The IHF's chief executive, Paul Gallagher, called the increase "the wrong signal at the worst possible time." He argued that the cost of delivering new hotel capacity is already prohibitive, leading to stalled projects nationwide.

“

already prohibitive and projects right across the country are stalled as a result

The move by Dublin City Council was partly influenced by Green Party councillors who advocated for doubling the hotel development contribution to steer investment towards housing construction. However, the IHF countered with analysis indicating a national shortfall of 10,000 to 15,000 hotel bedrooms by 2031. They emphasized Dublin's role as a primary entry point for overseas visitors and warned that constrained hotel investment could negatively impact national tourism targets.

“

direct more money towards house building

"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," Gallagher stated, highlighting the potential conflict between housing goals and tourism industry needs.

“

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.