It would be hard to overstate the challenges faced by the Irish hospitality sector over the past two years and two months. Almost overnight its decades-long progress at home and abroad came to a bone-shaking halt.
The Covid-related collapse of international travel and the enforced closure of hotels, restaurants and bars for long periods at various points since early in 2020 brought a sector, which was once worth billions to the Irish economy and which employed close to 300,000 people, to its knees.
As if all that wasn’t bad enough, it has had to contend with a chronic shortage of suitably trained staff and a once-in-a-generation spike in inflation that has put almost every link in the hospitality chain – food, lighting, heating, transport and labor – under intense pressure.
Then there is the war in Ukraine feeding greater uncertainty and taking bedrooms out of the Irish hotel industry’s inventory as refugees from that conflict who have come to Ireland are provided with short-term shelter. And of course, Covid-19 continues to lurk in the background with its trajectory in the months ahead still very much uncertain.
But people love to travel and they are starting to do that again in big numbers, with a question mark now hanging over who exactly is going to pay the price of all the turmoil in the months ahead.
Earlier this week there were just 42 rooms available in the center of Dublin for three nights over the June bank holiday weekend on the popular hotel reservation platform booking.com. While the lack of availability was striking the lack of affordability was even more so.
Only one of the 42 rooms on offer was coming in at less than €150 a night, while there were two available for between €150 and €200 with the remaining 39 rooms on the table for €200 or more per night.
A closer look at the cost of a long weekend in a Dublin city hotel revealed that three nights for two adults in the fairly recently opened Hard Rock Café Hotel was coming in at €1,147 with three nights in the Jury’s Hotel in the shadow of Christchurch Cathedral priced at €1.304.
The two hotels were by no means outliers.
Berlin, meanwhile, had 260 hotel rooms up for grabs for the same weekend, 11 costing between €50 and €100, 35 priced in the €150-€200 range and 86 rooms costing between €150 and €200. There were 125 rooms on offer with a price of more than €200 a night.
I know these businesses need to recover, but they cannot expect to recoup all their losses in the course of a year
Three nights in the five-star Berlin Marriot for two people was €639 while the four star Moxy was €399.
There were 446 hotel rooms up for grabs in the Portuguese capital Lisbon, with 22 costing less than €50 and a total of 260 – or almost 60 per cent – priced at less than €200 a night.
The high price of hotels close to home attracted the attention of Fianna Fáil Senator Timmy Dooley, who last week suggested that “price gouging” was happening in Ireland.
“I know these businesses need to recover, but they cannot expect to recoup all their losses in the course of a year, because that approach will damage our image internationally,” he said, calling for more debate on the issue of hotel prices in Ireland .
Would-be guests of Irish hotels have been happy to join that discussion.
“I bought my elderly parents two tickets to a concert the Christmas before Covid,” Siobhan O’Dwyer told The Irish Times. “I also paid up front for a hotel room in Dublin.”
The concert was canceled as a result of the pandemic and then rescheduled. “I rank the hotel looking for the same room. They were honoring a voucher for the €169 that had been paid originally. The prices had gone up to €10.”
She was “a bit cross” but did not have a big problem with the increase. The show was canceled again and it was rescheduled for this weekend.
So O’Dwyer rank the hotel with the same voucher “only to be told same room, the same B&B was now going to be €180 more expensive. I nearly burst into tears; I had to beg them to do something for me. We eventually agreed on an extra €100. I’m disgusted,” she said.
Fiona Malone, meanwhile, said that she had booked “lots of things like concerts and events in Ireland for the summer months” in anticipation of the world getting back to normal “but little did we think getting accommodation would be near impossible,” she says .
She lives in Limerick and plans on heading to the Irish Open in Kilkenny in July and the Garth Brooks concert in Dublin in September.
She says she has been unable to find accommodation for the Kilkenny event at any price, and the cheapest price she can find a hotel room in Dublin on the night of the Garth Brooks concert is in excess of €300.
“Recently I had American cousins over to Limerick and they stayed a couple of nights in a hotel and they paid €180 a night, for Limerick! I am not sure what can be done about the hotel situation in this country to control prices, but they are forcing people to consider traveling abroad. It would work out better value to travel to Europe and spend a couple of days on a mini break than travel to Dublin at this rate.”
According to their own estimates, Irish hotels lost €5 billion in revenues as 19 million bed nights disappeared between 2020 and 2021
Jeanne Dowling Kinane meanwhile had to travel for work purposes for a week after Easter and as she was going to be based “quite a distance from home” she thought she would find a hotel in the Cork area. She said that when she first checked, months before the trip “rooms were crazy prices. Left it a few weeks thinking that perhaps they would be cheaper nearer the day. More fool me. Not huge availability and cheapest available was €189.”
Over and over again, people have been telling the same story and the growing concern about high prices for Irish hotels is coming as the Government confirmed it would extend the special 9 per cent VAT rate for the hospitality sector beyond its current expiry date of next August .
That extension will cost the Exchequer – and Irish tax payers – up to €250 million at a time when Irish hotels are outperforming most of their counterparts across Europe.
According to their own estimates, Irish hotels lost €5 billion in revenues as 19 million bed nights disappeared between 2020 and 2021. Arguably, hotels need the relief offered by the lower rate of VAT if the sector – which contributes around €2 billion to Revenue’s coffers in a good year – is to thrive once more.
But while life has undoubtedly been hard for the industry, things are looking much better for the months ahead.
A recent hospitality conference in Berlin heard that Irish hotels were above 81 per cent of 2019 occupancy levels over four weeks last month, making them the third-best performing in Europe behind only Britain and Poland.
A soon-to-be published Irish Hotels Federation (IHF) survey also shows a rapid recovery in bookings and occupancy, while Dalata, Ireland’s largest hotel operator, told its AGM late last month that bookings for April were almost 10 per cent up on 2019 levels.
Although no one from the hotels federation was available to talk to The Irish Times about the state of the sector and the concerns about rising prices and a chronic lack of availability, it did provide a statement.
“We are hearing from our members that there is a steady flow of bookings coming in for the summer season,” it said.
Shopping around may well be the best advice on the table when it comes to hotels, but there might be little to be gained from time spent seeking out the best value for money
“This is very welcome given that we were closed for leisure this time last year. Not surprisingly, there is stronger demand in popular tourism destinations and hotels offering packages and facilities for families.
“However, the IHF encourages people to explore all parts across the country, where there may be wider availability including at peak times.”
Contrary to what many people who have contacted this newspaper have found, it said there was “excellent value to be had throughout the country”.
It suggested guests “should shop around and contact hotels directly to find out what special offers are available, including mid-week specials for those whose dates are flexible. We also encourage guests to not rely on just one source when comparing accommodation prices”.
Shopping around may well be the best advice on the table when it comes to hotels, but if the experiences of many who have tried that in recent weeks is anything to go by, there might be little to be gained from time spent seeking out the best value for money.
And – as the sector will know all too well – it can quickly gain a reputation for being overpriced, and when that happens things might starting getting very tough all over again.