Hotels deny allegations of price cuts

Hotels deny allegations of price cuts

Hotel owners have cracked down on allegations of price cuts and rip-off prices, amid allegations in recent weeks that some of them are using a strong recovery in demand to raise prices.

According to an analysis carried out by the Irish Hotels Federation (IHF), a combination of reduced supply and strong demand has meant that the majority of average price hotel rooms are sold out months in advance.

This leaves only the more expensive rooms in the more expensive hotels to choose from in the near future, which gives the wrong impression that prices are rising to take advantage of the strong demand, especially around events, it claims.

The organization says the problem is particularly acute in Dublin, where there is a significant shortage of necessary rooms.

There are a total of 22,492 registered rooms in the capital, of which 82% are used as hotel rooms.

15% is currently used for state affairs, such as settling those fleeing the war in Ukraine as well as asylum seekers.

The remaining 2% are not available due to staff shortages, renovations or because they are used to house staff.

However, the IHF claims that the pent-up demand from consumers and companies on the demand side in April will take place.

As a result, it is said, Dublin had the highest occupancy rate of any city in Europe with 83.6% in April.

According to independent consultants STR, the average room price that month was € 154, lower than in London, Rome and Amsterdam, with indications that it came in around € 177 in May.

That would set it at 16.5% higher than in April 2019 and 15% higher than in May 2019, which the IHF claims is reasonable given the inflation-driven environment that increases staff, energy, insurance and supplies costs.

“Actual average price increases have been much lower and the overall value for money in the Dublin market remains competitive with our European counterparts in relation to the very high quality of our hotel and guest house products,” said IHF CEO Tim Fenn.

Some hotels are also still dealing with deals booked in 2020 and 2021 but postponed due to the effects of the pandemic, the agency claims.

A large number of postponed concerts, sporting events and other events are currently taking place in the capital, which is driving up demand for rooms, according to the IHF.

“Dublin hotels are also experiencing a significant increase in demand from activity in the broad economy, for example with large-scale commercial construction projects that have restarted,” added Mr. Fenn.

As a result, the IHF claims that there are now more nights, especially on weekends and nights when there are large concerts or events, where occupancy in Dublin exceeds 90%.

This leaves the only available rooms quoted at prices above the average daily room rate.

In fact, the data show that during the month of June, 80% of available hotel rooms for June had been pre-booked, up from 65% compared to the same time in 2019.

“The current imbalance results in what we expect to be a short-term disruption in the market, which is likely to be resolved when pent-up demand declines and additional hotel room stocks start up,” Fenn said.

The IHF analysis follows weeks of claims from politicians that they received complaints about the high cost of hotel rooms and low availability.

Fianna Fail Senator Eugene Murphy spoke about how he had slept in his car twice because he could not find suitable hotel accommodation in Dublin for less than 200 euros.

Foreign Minister Patrick O’Donovan said it was unfair to have high hotel prices every time there was a concert when the government had lowered the VAT rate for hospitality.

Tanaiste Leo Varadkar warned that the future of the lower VAT rate could be at risk if hotels turn out to have price reductions.

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