Vat breaks help hotel prices here drop to half those in Paris or London

Dublin hotel prices are half those of London and Paris, helping occupancy rates in the Irish capital grow to 78pc in the past three years.

A hotel room in Dublin cost an average of €96 in 2014 compared with €255 in Paris and €197 in London, Sarah Duignan of STR Global consultants told the Irish Hotels Federation conference in Cavan this week.

Prices in Dublin are now eighth from bottom in a survey of 20 European cities – but occupancy rates are third highest in Europe behind the French and UK capitals, she said.

There have been 34 consecutive months of recovery in occupancy rates for Dublin hotels and 20 months in the regions.

The 9pc tourism VAT rate has been instrumental in making the tourism sector more competitive and helping to create over 30,000 new jobs in the last three years, economist Alan Ahearne said. Many hotels had cut staff numbers following the economic crash, but the lower Vat rate allowed them to take on new staff and invest in refurbishment.

The highly competitive world of international tourism meant no other sector would deliver such a “bang for your buck” in return for a tax break, he said.

However, the latest Central Statistics Office figures show hotel prices rose by over 5pc in the last year, even though the general cost of living fell.

Fáilte Ireland chairman Michael Cawley warned hoteliers against any price hikes that could jeopardise future growth.

But IHF president Stephen McNally said increases in the last year came after massive falls and were needed to allow hotels refurbish.

“We were hit by a tsunami in the last five years when prices hit the floor, and they are still nowhere near pre-recession levels,” he said.

The hotel sector is still burdened down with almost €3bn in unsustainable debt.

There is now a three-tier hotel sector as Dublin powers ahead and many in smaller towns and regions struggle, warned Aiden Murphy of Crowe Horwath accountants.

Some 68 hotels were sold last year and at least the same number will change hands in 2015 as there are a lot of buyers around with cash to invest, he said.

Meanwhile, Google said it planned to offer Irish consumers one-click holiday bookings and personalised travel information before they even ask for it. The new Google Wallet and Google Now services will help capture tourists making holiday plans via mobile or tablet.

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