Joint Committee on Tourism, Culture, Arts, Sport and Media debate -
Wednesday, 15 Jun 2022

Rising Cost of Tourist Accommodation: Discussion

Chairman

This meeting has been convened with representatives from the Irish Tourism Industry Confederation, ITIC, the Irish Hotels Federation, IHF, Fáilte Ireland and officials from the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media for a round-table discussion on the rising cost of tourist accommodation. On behalf of the committee, I warmly welcome from the Irish Tourism Industry Confederation, Mr. Eoghan O'Mara Walsh, chief executive, and Ms Ruth Andrews, board member of ITIC and CEO of the Incoming Tour Operators Association; from the Irish Hotels Federation, Mr. Tim Fenn, CEO, and Ms Denyse Campbell, president; from Fáilte Ireland, Mr. Paul Kelly, chief executive, who is no stranger to these committee meetings, and Mr. Paul Keeley, director of regional development; and from the tourism unit of the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media, Ms Orlaith Gleeson, principal officer, and Mr. Bernard O'Shea, principal officer.

I ask everyone to bear with me while I go through some housekeeping. The format of the meeting is that I will invite all of our witnesses to deliver their opening statements, which are limited to three minutes each. These will be followed by questions from my committee colleagues. As witnesses are probably aware, the committee may publish the opening statements on its website. To limit the risk of spreading Covid-19, the service encourages all Members, visitors and witnesses to continue to wear face masks in crowded settings on the campus.

Before I ask witnesses to deliver their opening statements, I will explain some limitations regarding parliamentary privilege and the practice of the Houses as regards references that may be made to other persons in evidence. The evidence of witnesses physically present or of those who give evidence from within the parliamentary precincts is protected, pursuant to both the Constitution and statute, by absolute privilege. Witnesses are reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of that person or entity. Therefore, if their statements are potentially defamatory in respect of any identifiable person or entity, they will be directed to discontinue their remarks.

Members are reminded of the long-standing parliamentary practice to the effect they should not make comment on, criticise nor make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. I remind members of the constitutional requirement whereby they must be physically present within the confines of Leinster House to participate in public meetings.

Members who may be joining the meeting via Microsoft Teams are asked to identify themselves when contributing for the benefit of Debates Office staff preparing the Official Report, and to mute their microphones when not contributing to reduce background noise and feedback. I remind all those joining today's meeting to ensure their mobile phones are in silent or airplane mode.

We will take opening statements starting with Mr. Eoghan O'Mara Walsh, Irish Tourism Industry Confederation, ITIC; Mr. Tim Fenn, Irish Hotels Federation, IHF; Mr. Paul Kelly, Fáilte Ireland; and Ms Orlaith Gleeson on behalf of the Department. I invite Mr. O'Mara Walsh to take the floor.

Mr. Eoghan O'Mara Walsh

I am grateful for the invitation to address the committee on the subject of the rising cost of tourism accommodation. ITI, is the representative group for the broad tourism industry and our members comprise, all key stakeholders within the sector including carriers, accommodation providers, attractions, tour operators, restaurants, vintners and others.

Pre-pandemic, tourism was the largest indigenous industry and largest regional employer supporting 270,000 jobs nationally. That is where we want to get back to. The past two years have been economically harrowing for Irish tourism with estimated losses of more than €12 billion as international visitors were kept away. But for Government support and business from the domestic market, the industry simply would not have survived. Since earlier this year though, when restrictions were finally lifted, travel and tourism have bounced back strongly. The challenge now for business is delivering capacity to meet soaring demand. This is not unique to Ireland and has been seen at airports, hotels, car rental providers and hospitality businesses across the EU. Today understandably the focus is on tourism but it is important to note that many of the pressures and issues at home are mirrored abroad.

Certainly the short-term recovery of the tourism industry has been much stronger than anybody could have anticipated. A pent-up desire to travel along with consumer savings and deferred bookings have meant that demand has surged. Combined with soaring cost inflation pressures, capacity shortfalls and labour shortages, this has resulted in increased prices charged to both the domestic tourist and international visitor alike. It is only right that the spotlight is on value and retaining value is vitally important for Irish tourism’s recovery.

Today’s discussion is on the cost of tourism accommodation, which has risen sharply in recent months. It is important to start with the data. The average rate of a room in Dublin in April, the most recent month for which we have independent data, was €154, which was 16% higher than the same month pre-pandemic. A similar percentage increase is anticipated for May. This rate of increase is on a par with European city peers and this was also a month in which 12 concerts and sporting events took place in the capital city meaning many hotels were sold out.

Two principal reasons prices have risen are escalating cost pressures and an acute shortage of supply. A hotelier in West Cork recently told me about his 25% hike in insurance costs, the 40% increase in linen costs, and the doubling of his electricity bill. These cost increases and more are borne out by every independent economic study and, understandably, they will drive the cost of a room higher. There has also been a sharp reduction in tourism accommodation supply. Since the war in Ukraine, Government has taken a significant number of rooms out of the system to rightly facilitate those fleeing the conflict.

There are a number of new hotels due to open this year and next and, as supply restrictions are eased, this will alleviate pressure and moderate prices. 2022 cannot be seen as a normal year and there are concerns about the momentum of demand into next year. ITIC has estimated that full recovery will not be secured until 2026. Industry and Government must adopt a medium-term view and pursue pro-business and pro-tourism policies. Jobs, regional economic balance and Exchequer receipts are dependent on a healthy tourism industry.

Mr. Tim Fenn

The IHF welcomes this opportunity to address the joint committee. Our sector is coming out of an exceptionally challenging two years, during which hotels lost more than €5 billion in revenue. Government supports, which were very much appreciated, were vital to the survival of many businesses, and we now look forward to recovery and sustainable long-term growth in the supply of important hotel infrastructure within the Irish economy. As outlined in our submission, we have seen a much faster rebound in tourism than anyone previously anticipated. However, due to a combination of factors, there is a significant imbalance at present in supply and demand for hotel rooms in Dublin.

On the demand side, in April, Dublin had the highest occupancy rate of any city in Europe at 83.6%. The average daily rate for a hotel room was €154.31, behind Amsterdam, Rome and London. The average rate was up 16.5% on April 2019 but comes at a time hotels are reporting spiralling operational costs, with year-on-year increases of 88% in energy, 18% in food and beverage supplies, over 30% in linen services and 20% in insurance costs. On the supply side, Dublin has 22,492 hotel and guest house rooms. We estimate that 82.4% of these are operating as hotel accommodation at present. The remaining 17.6% of rooms relate to Government contracted business and rooms out of service for operational reasons. These supply issues are further compounded by delays in the construction of new capacity due to the pandemic.

The combined effect of these exceptional factors is that there are now more nights where occupancy in Dublin exceeds 90% and the last available rooms are quoted at rates in excess of the average. This has given rise to significant levels of media and political commentary and misperceptions around the overall value for money in the market in Dublin, which remains competitive with our European peers. What is often lost in this commentary is that the vast majority of rooms currently sold have been contracted and previously booked well in advance at rates significantly below the last available rates. For the current month approximately 80% of the available rooms were sold in advance of 1 June, up from 65% in 2019. This dynamic illustrates what we expect to be a short-term disruption to the market, which is likely to resolve itself as pent-up demand eases and additional hotel room stock comes on stream. We look forward to discussing these issues with the committee in further detail and addressing any questions that individual members may have.

Mr. Paul Kelly

I thank the committee for the invitation. As the national tourism development authority, Fáilte Ireland’s role is to support the long-term sustainable growth of this vitally important industry. Specifically on accommodation, we are responsible for ensuring that accommodation quality standards meet visitor needs. Commercial decisions such as pricing are the sole responsibility of business owners. We have no role in the setting of prices in accommodation or in any other tourism business.

In this context, I want to provide Members with our analysis of the current situation. Four years ago, Fáilte Ireland advised that Dublin required at least 1,100 more hotel rooms in addition to the 5,000 extra bedrooms that were in development at that time. The distorting effect of the pandemic makes it too difficult to robustly analyse the long-term supply versus demand needs currently but it is abundantly clear that we still require more hotel rooms to meet the city’s diverse needs for short-term accommodation. Hotel occupancy in Dublin is now one of the highest in Europe, driven by a range of factors, some of them short-term. These include deferred business conferences, group tours, concerts, weddings, accommodating asylum seekers and displaced Ukrainian citizens, emergency homeless accommodation and, as has been highlighted, an exceptionally strong recovery in domestic and overseas tourism. Hotels are just one accommodation type in a situation where all accommodation is in short supply.

This excess of demand over supply combined with rapidly rising input and wage costs and a staffing and skills shortage, all after two years of massive revenue loss, has all created significant upward pressure on market pricing. As has been said, there are just over 22,300 hotel rooms in Dublin. Another 3,500 are coming on stream over the next two years. We need these new rooms and more. We must have a capital city that can cater for all types of visitors with quality and value choices to suit different budgets. Fáilte Ireland for some years now has been trying to encourage both positive conditions for development and the development of hotels in Dublin through sharing our evidenced-based analysis and through our role as a prescribed body in the planning process.

Ireland is not a low-cost destination, but it is seen as a good value destination because consumers have found the quality received was worth the price they have paid.

In recent years our value-for-money score has been positive and consistent, with about 8% saying they got poor value for money and 80% reporting having received good value for money. Early indications suggest, however, that those scores are likely to worsen over the summer. The industry needs to be very much conscious of Ireland's reputation as a good-value destination. If that reputation is damaged, it will take time to recover. We continue to share our research with the tourism industry and to encourage it to be mindful not just of the revenue of today but also of our reputation for tomorrow.

With most challenges there is also opportunity, and the opportunity in this challenge is to grow the tourism economy in developing regions. This summer we will put unprecedented levels of marketing support into developing tourism destinations such as Cavan, Monaghan, Louth, Offaly and many others. We are also diverting our support into promoting autumn and winter holidays, where more capacity and better value will be available.

Ms Orlaith Gleeson

I welcome the opportunity to discuss this important issue with the committee. Tourism is a key part of the economic activity of Ireland. It is important in particular because of its reach across the country and into all regions. As the sector rebuilds, it is hoped that tourism in 2022 will reach around two thirds of the activity level of 2019.

As members of the committee will be aware, significant funding supports were put in place throughout the Covid-19 pandemic to keep the tourism sector alive and to support this initial rebuild phase in 2022. However, this initial recovery stage has been unpredictable and is not without its challenges. The final loosening of restrictions occurred in Ireland only from the end of January of this year, and the speed and pace of the return of tourism has brought issues for all tourism businesses.

There has been an increasing number of anecdotal reports of excessively high pricing in the hotel sector. Whether that is reflective of the general market or of the prices being sought online for last remaining rooms does not negate the possibility that this could have a negative impact on our reputation as a visitor destination. It is important that Ireland maintains its reputation as a value-for-money destination. Value is not just about the price one pays; it is also about what one gets for that price. Irish businesses have proven before that visitors are attracted back again and recommend Ireland to family and friends. Businesses across the whole tourism ecosystem should consider the medium and long term in making their decisions on value for money.

I would also caution that the strong regrowth this year in Irish tourism should not be assumed to be a baseline for future years, given the high level of pent-up demand and rollover business from 2020 and 2021. We cannot assume linear growth in future years and we should be prepared for challenging trading conditions in 2023. If recent years have taught us anything, it is to expect the unexpected.

In common with the wider economy, there have been sizeable increases in the costs of key inputs such as energy and insurance and difficulty in recruiting and retaining key skills. These challenges are not unique to Ireland; they are shared by many countries and contribute towards higher costs for businesses. It is important that any discussion recognise that changing landscape for businesses in respect of cost challenges. I know that the committee has already discussed the skills challenges facing the tourism industry and will be aware of the steps being taken by our colleagues in Fáilte Ireland to address the issue.

It is also clear that there have been changes in the available supply of accommodation in hotels due to a range of factors including availability of staff and the humanitarian need to accommodate people fleeing war in Ukraine.

The Department has engaged with Fáilte Ireland, Tourism Ireland, ITIC and the Irish Hotels Federation in order to further understand underlying issues surrounding the recovery of the tourism sector. We are working with the tourism agencies to identify potential actions such as the re-weighting of marketing campaigns to ensure that promotional activity is aligned with supply across the year.

When we look at the wider economy and the particular set of challenges facing the tourism industry, it is clear that a collective and concerted multi-stakeholder approach to tackling those challenges is required. We all want to see the return of a sustainable and vibrant tourism sector. The Department will continue to work towards that goal.

Chairman

I thank all our guests for their comprehensive statements and for sticking to the time - brilliant.

I now move to my colleagues. They have six minutes each for questions and answers. I begin with Senator Cassells.

Senator Shane Cassells

I thank all our witnesses for appearing before the committee to discuss the escalating costs in this sector and how the issue is being addressed and teased out with the key stakeholders in the area.

A quick look on my laptop at a booking website shows that in Dublin tonight only six properties have rooms available. There is a hotel where 300 Deputies, journalists and others gathered just a few weeks ago for a quiz night. A room in that hotel is going for the knock-down rate of €797 tonight. I am going to Spain next month and got return flights for three people yesterday for €731.55. That is a difference of €65.45. I would have enough with that to buy myself and Deputy Christopher O'Sullivan here a round of drinks in Temple Bar tonight. What I have heard today is that there has been a misrepresentation of the discourse on the issue of pricing and rates and that there is value if people book months in advance. I think everyone here would accept that. What I do not accept, in particular as a sports fan, is, if there is a big game in Croke Park or the Aviva or a concert in the 3Arena, the exploitation that can happen, with hotel rates going through the roof. It is fundamentally wrong and is exploiting Irish people. The cost of a steak to a restaurant does not go from €25 to €100 the same day as an all-Ireland final; it stays at €25. Suddenly, however, the sector thinks that just because 80,000 people are coming into the city, it can exploit that situation.

I will ask my questions. I am looking at Mr. Fenn, who is a regular contributor here. In his conclusion and his analysis of the situation he termed this a short-term disruption to the market. Everyone has his or her own choice of words, and I accept what Mr. Fenn said. I would term it a short-term exploitation of the market due to a number of scenarios. What I am asking Mr. Fenn, following on from what Mr. Kelly said about the damage to Dublin city and the country and our reputation from a tourism point of view from this going on at the moment, is whether he accepts that our reputation in respect of the pitch to foreign and domestic customers will be highly damaged if I can book flights to Spain for three people for a price that is cheaper than the cost of staying tonight in this city.

Mr. O'Mara Walsh talked about the fact that industry and Government must adopt a medium-term view and pro-business and pro-tourism policies. The Government has very much adopted a pro-business and pro-tourism policy, which Mr. O'Mara Walsh has acknowledged, not only in the support it has provided but also in acceding to the request made in respect of the VAT rate in order to give people a fighting chance to provide services, given that there have been staffing pressures. However, that is not operating as a two-way street. The support is not coming back. Pro-business and pro-tourism policies have been put in place. Where is the buy-back for the consumer in respect of that two-way street? I will start with Mr. O'Mara Walsh.

Mr. Eoghan O'Mara Walsh

I fully accept that the Government has been pro-tourism. It has listened to the industry and representative groups that are represented here today, for example, and has pursued pro-business and pro-tourism policies during the pandemic. Thank God it has because there are 20,000 businesses-----

Senator Shane Cassells

Absolutely.

Mr. Eoghan O'Mara Walsh

-----in the tourism and hospitality sector. It is the biggest indigenous industry and the largest regional employer by some distance.

The prices the Senator mentioned for rooms tonight are excessive - I would not purchase rooms at those rates - but I do not think they are reflective of the wider industry. It is interesting that he said he looked online and found six rooms tonight in Dublin. Mr. Fenn will correct me on this if I am wrong, but there are 20,000 bedrooms, possibly 22,000, in Dublin, so if only six are available-----

Senator Shane Cassells

Six properties, that is, six hotels.

Mr. Eoghan O'Mara Walsh

Okay. Well, there are not many rooms available, which is a sign that Dublin is full tonight. Before I came here, I looked at what is available for Saturday night. There were a handful of rooms available. They were in and around €200. Herbert Park Hotel and Buswells are examples-----

Senator Shane Cassells

My question was, in respect of Mr. O'Mara Walsh's analysis and the medium-term view he calls for, is whether he is asking consumers and, more important, the Government to accept the pricing that prevails at present.

Mr. Eoghan O'Mara Walsh

The focus on pricing, if it is on the last available rooms and they are excessively-----

Senator Shane Cassells

I was using the point about being excessive, and I checked that.

Mr. Eoghan O'Mara Walsh

-----priced, I do not believe that is a positive reflection on the hotel or tourism industries. If one looks at the broad average rate, which is all we can look at, for a particular month - and this is collated by an independent very credible and respected third party source - it is about €155 for the previous available month in Dublin. This was 16% higher than the same month in 2019. That is undeniably a significant jump but it is largely driven by inflationary costs and a supply shortage. The Government has been very supportive and I would urge it to continue to be so because full recovery of the tourism industry is about three to four years away. This year is unique in many ways as there are all sorts of variables in there, including supply being taken out of the system and hyperinflationary costs.

The year 2023, for example, is going to be far tougher and softer. We need the Government pro-tourism policies to be maintained on the competitiveness and investment fronts.

Senator Shane Cassells

Speaking to Mr. Fenn on the reputational front spoken about by Mr. Kelly, is it a concern of the federation's members that reputational damage will be done? Is what Mr. O'Mara Walsh is talking about in bringing in additional cash now to soften the blow of a softer 2023 strategy?

Mr. Tim Fenn

Perhaps I will put a context on this. I cannot comment on individual prices. Similar to other representative bodies, we are subject to certain constraints under competition law. In the interests of consumers it is essential that businesses set their prices independently. This is a legal requirement and therefore we are not in a position to make any comments that would be potentially interpreted as seeking to influence hotel prices.

We are not here today to defend prices but we wanted to provide some context to what we believe is a misperception, not a misrepresentation, in the market as to what is happening. That is why we look at the average room rates for the years and compare them with other cities and with previous years, etc. The key challenge for us at the moment is that Dublin does not have enough supply. Dublin is a very attractive city and there is great value in it but the problem is that we have come to a stage where there will be nights, particularly perhaps for some of these football matches or big concerts, where Dublin does not have the capacity to deal with it and there is a challenge around that.

Chairman

Is the Senator finished or are there any further questions he may wish to ask, briefly?

Senator Shane Cassells

I have a quick question for Ms Gleeson from the Department. The Government and the Department also have a key role in this because we supported the industry. Is it a case that the 9% VAT rate is under pressure because of the hotel pricing and that maintaining that rate is an uphill battle? In particular, because there are other aspects to this and businesses which avail of this rate, such as restaurants, theatres, hairdressers - which is a very significant swathe of businesses - their prices, as I have said, are not escalating on a daily basis. Their prices are there, are set, one can see them on a weekly basis and they remain the same. Is that rate under threat because of what is happening in the wider sector with hotels?

Ms Orlaith Gleeson

I am aware that the Minister commented on this before this committee two weeks ago. Perhaps Mr O’Shea would like to respond to that question, please.

Mr. Bernard O'Shea

I will confirm what the Minister said a couple of weeks ago when asked this very question. She said that all matters would be on the table when the Government considers the issue of a further extension of the VAT rate and I am not in a position to add to what the Minister has said.

Senator Shane Cassells

I will ask Mr. O'Shea a different question then. There are seven countries within the EU which have a split rate. These are Belgium, Estonia, Finland, Latvia, Malta, Portugal and Slovakia. They extrapolate both sectors and take the restaurants away from the hotels, so that the restaurants can still benefit from the VAT rates. Is that something that the Department has examined? I am not asking for a policy initiative from the point of view of what the Minister might do but is it something that the Department has examined?

Mr. Bernard O'Shea

It is certainly something that was considered even going back to the pre-Covid-19 period. There was some controversy about this very issue around hotel prices. The advice from the Department of Finance at the time was that it was not possible within our current VAT structure and EU rules to do that.

Senator Shane Cassells

I have just named seven EU countries which do that. Portugal is a country which depends upon tourism.

Mr. Bernard O'Shea

Sure, but that was the advice we received from the Department of Finance at the time.

Senator Shane Cassells

That does not fill me with much hope in looking outside of the box to ensure that in the context of this budget, we will not have the scenario of one sector which is looking for continued Government support, but from which we are not getting a two-way payback in what consumers are expecting, and others who are playing by the rules and are not increasing their prices may suffer. That is something that we have to address and I do not want to see restauranteurs lumped in and getting nailed because of what is happening at present.

Chairman

I thank Senator Cassells but I will have to move on in order to give enough time to everybody. I now invite Deputy Munster to speak, please.

Deputy Imelda Munster

I am just reading Mr. Fenn’s report to the effect that the sector has seen a much faster rebound in tourism than anyone would have previously anticipated resulting in a very strong recovery in demand that far exceeded all forecasts. That is great news with which I am sure he would agree.

Mr. Tim Fenn

It is great news, I would agree. What is important when one looks-----

Deputy Imelda Munster

I just wanted Mr. Fenn to acknowledge that that in itself was good news for the sector and the industry. Why, then, are there such extortionate room rates being charged and why is there such price gouging?

Mr. Tim Fenn

Again, I repeat that we cannot comment on pricing but we can comment on-----

Deputy Imelda Munster

Mr. Fenn can speak in general. He has given a report today and has quoted prices in his report from various countries on hotel average room rates. Of course he can comment-----

Mr. Tim Fenn

The average room rate-----

Deputy Imelda Munster

----- he represents the industry and is out there looking for supports and VAT reductions and that sort of thing.

Mr. Tim Fenn

We can comment on the prices that are there as to the average room rates and what is going on in the market but what we cannot do is-----

Deputy Imelda Munster

There is price gouging and extortionate room rates. Mr. Fenn can make a general comment because he would look quite silly if her were to sit here and fail to acknowledge the extortionate room rates that are being charged at the moment and the price gouging that is going on within the industry.

Mr. Tim Fenn

Okay, we are not here to defend prices. We are here to try to provide some sort of perspective on what is happening in the market. We would suggest that the average room rate is competitive and there are 22,500 rooms in Dublin, most of which are contracted at rates which are much lower than the rates that the committee seems to be focusing on.

Deputy Imelda Munster

I heard Mr. Fenn say that a moment ago. Again, I will give Mr. Fenn an example and he can check it out any day of the week. Just this morning, for one night for a room in the second week of July for Dublin, the cheapest rate was €379, with no breakfast. The price for a four star hotel room in Madrid was €120 and for a four star room in Lisbon was €141. Paris was €147 and Amsterdam was €141. Again these are extortionate room rates here.

Mr. Tim Fenn

Again, we have to feed back to the average room rate.

Deputy Imelda Munster

I do not know how anybody could justify that but can Mr. Fenn justify it?

Mr. Tim Fenn

We are not here to defend individual room rates and cannot comment on the prices that the Deputy is talking about there.

Deputy Imelda Munster

As the industry representative, he can comment as I have just given him a comparison. I can give him further examples which are actually worse and more embarrassing for the industry. I am talking about the industry which Mr. Fenn represents and asking him if he can justify rooms which are three times, or two and a half times, more expensive than other European hotel rooms when other such hotels are facing the same cost of living crisis that the industry is facing here? Can he justify that?

Mr. Tim Fenn

Let us try to put some perspective on what the Deputy is suggesting there. When we compare cities, we look at the average rates across the market and then we-----

Deputy Imelda Munster

My apologies for interrupting Mr. Fenn but I am talking about your average person who is trying to book a room in two, three, four, five or six weeks time. They are not asking themselves how that compares with the average price, overall. We are talking about what is on display for people who want to have a break or to go on holidays. I have given Mr. Fenn one example and if he is not prepared to say that that is unjustifiable, I will leave that with him. But-----

Mr. Tim Fenn

Perhaps I might give the Deputy another prospective on this. When one compares different cities, one has to ensure that one is comparing like with like as to the star classification, or whatever. If you book a seat on a flight, and perhaps you book an early flight; when you pick your seat on that flight, if the rest of the flight is empty, the chances are you will get a very good price.

If that person is booking the last two seats on the flight, it is a different price.

Deputy Imelda Munster

Would Mr. Fenn see that as price gouging because it is the last couple of seats?

Mr. Tim Fenn

Maybe if I could finish, the key point here is that-----

Deputy Imelda Munster

I am asking a question. I do not want Mr. Fenn talking down the clock. He referred in his statement to situations at weekends and nights when there are major concerts or events when occupancy in Dublin exceeds 90% and the last available rooms are quoted at rates in excess of the average room rate. That is price gouging by any other name; it is a rip-off. That is in Mr. Fenn's own statement.

Mr. Tim Fenn

We stand over the statement we made but we cannot-----

Deputy Imelda Munster

Mr. Fenn acknowledges that price gouging goes on and people are charged rip-off rates.

Mr. Tim Fenn

I did nothing of the sort.

Deputy Imelda Munster

That is there in black and white. I am saying this in the context of the pandemic. When Mr. Fenn's sector was in crisis and people were encouraged to holiday at home, people supported the sector. I think it was Mr. O'Mara Walsh who said they helped the survival of the industry. The minute things are starting to open up, we have the rip-off again. We have extortionate room rates being charged. It is easy to compare them with other European cities and there is no comparison. It is going to drive people out. Vast reputational damage is being done to this country as a value for money destination and the Irish Hotels Federation is not thinking in the long term. I do not know if Mr. Fenn is aware that international tourists are well able to compare prices. Instantly Ireland will get the reputation of being too expensive with hotel rooms at rip-off rates and they are not going to come here. Domestic tourism that did support the sector when it was pleading for help and support is not going to forget. Everybody is living in a cost-of-living crisis. How is a family of four, say, ever to book a room? There are many hotels in quieter places around the country that are offering good value for money and doing all they can to encourage tourism, yet here we have these rip-off rates in Dublin and other cities. Mr. Fenn comes here with no plan to tackle it, no plan to make a public statement calling on the Irish Hotels Federation's members to be reasonable and offer value for money and not to rip off the public.

Mr. Tim Fenn

The first point there is that we always encourage our industry to provide the best quality of product-----

Deputy Imelda Munster

How? Tell me how. In the current context of rip-off rates and extortionate room rates, tell me how the Irish Hotels Federation does that and how effective it has been.

Mr. Tim Fenn

In terms of our industry, there are about 62,000-odd hotel bedrooms-----

Deputy Imelda Munster

Yes, we know. How does the Irish Hotels Federation do that?

Mr. Tim Fenn

That is based on a quality framework that is agreed between the Irish Hotels Federation and Fáilte Ireland as the national tourism development authority.

Deputy Imelda Munster

It is not working.

Mr. Tim Fenn

Over years-----

Deputy Imelda Munster

It is not working. I have just given Mr. Fenn examples. Everyone around the room will give him examples.

Chairman

The Deputy's time is up. I have given her a bit of latitude. I ask her to wrap up.

Mr. Tim Fenn

I am trying to answer the questions.

Deputy Imelda Munster

I am asking how it has worked up to now. It has not. Those figures speak for themselves. Whatever it is the Irish Hotels Federation is doing, it has not worked. Reading Mr. Fenn's statement here, it is just defensive, defending the industry and the sector and not saying "boo" about the extortionate room rates hotels are charging. On the VAT reduction, you would seriously have to question its wisdom and the extension until February of next year. I think it was the Irish Hotels Federation that was looking for it to be further extended to 2025. It says that with a straight face. There is nobody - I do not even think the Government - who is willing to put up with this.

Chairman

We might give Mr. Fenn an opportunity to respond.

Mr. Tim Fenn

If the Deputy wants me to answer, I will.

Deputy Imelda Munster

Yes, where was that VAT rate reduction passed on to customers?

Mr. Tim Fenn

The VAT rate as we look at it is the right rate when compared with other European competitors. We compete every day of the week for international visitors against other countries in Europe.

Deputy Imelda Munster

Those prices do not reflect that. Where is the VAT rate passed on to customers? Not in the room rates.

Chairman

Deputy Munster, will you give the witness an opportunity to respond? You have had a good opportunity.

Deputy Imelda Munster

I will ask the question again. When we look at the extortionate room rates, how was the VAT rate the hotels received, because they were crying poverty and that other sectors did not receive, passed on to customers?

Mr. Tim Fenn

On the question about the VAT, if the Deputy will allow me answer, a 9% VAT rate is the right rate for our industry when compared with our competitors across Europe. If we go back to 13.5%, there will be only one other country within Europe that will have a higher rate than us. We compete every day of the week for international visitors. We attract people from overseas and have been doing so very successfully-----

Deputy Imelda Munster

Not for long.

Chairman

I have to draw this piece to a close. I have given as much latitude as possible. I am trying to be fair across the room. It is up to the members to use their time to ask questions, talk or give the witnesses an opportunity to respond.

Senator Micheál Carrigy

I welcome the witnesses. It is important that everyone acknowledges the significant Government support that has been put in place for the industry over recent years. The reality is that is taxpayer's money. We talk about low availability and last minute. Last April, I tried to book a room on a Saturday night. My young lad had a rugby match on the Sunday morning and we said we would come up. The cheapest we could get, and that was not at the last minute, was €600. That was at the end of April. There is something wrong with the figures. That is the reality when a person is going to look for a room. Significant supports went into the business. It is different for the likes of Ryanair to charge these extortionate prices at last minute when people are looking to book something. The hotel industry has to give something back to the consumer and the taxpayer. These extortionate prices have to stop.

Senator Cassells referred to concerts. Do concert promoters notify the hotel industry in advance when a concert is planned? It seems that as soon as a concert is announced, the hotel prices have nearly gone up in advance of the announcement in the public domain. We see then the extortionate prices that are put in place. On the VAT rate, as has been said by other members, it is going to be very difficult to get support to retain the VAT rate at 9% because of what is happening at the moment. However, there are significant other businesses out there such as restaurants and hairdressers that are also on the 9% VAT rate. If other EU countries can have a split rate, I cannot see why we cannot have one here. That is how seriously this is being regarded within parliamentary circles and by the people I have been talking to, because of what has happened. The industry needs to look seriously at this. It is not fair only to say the Irish Hotels Federation cannot comment. As a federation and the representative body for all hotels throughout the country, it has to come out strong and say this has to stop. This committee has been very strong in supporting the industry and the extension of the VAT rate. It will be very difficult for the committee to give full support if what is happening currently continues.

Ms Denyse Campbell

First, our industry could not have survived the past two years without the Government supports. As my colleagues have said, we are very grateful for them. To answer the Senator's question, when concert promoters announce dates, we have no knowledge of it. I have two points I would like to raise on it. When a concert is announced in Dublin specifically, it has a much further impact on the availability of rooms than if a concert or sports event is announced in, say, London. London is a larger city and has more hotel rooms and hotel stock. The issue we are dealing with now in Dublin, and as a hotelier working in Dublin for many years, is an exceptional level of advance bookings.

We have highlighted that in the paperwork we have submitted to the committee. If I may draw the committee's attention to that paperwork, we have used June as an example. As we approached June 2022, we had 80% of our business done; in other words, in 44 hotels in Dublin, 80% of the business was already in those hotels. That was a sample of 44 hotels taken by an independent company we use, as Mr. O'Mara Walsh mentioned. In 2019 the corresponding figure was 65%, so already there is pressure on the capacity in Dublin. That is one factor.

The other factor is that, as Mr. Fenn highlighted, we are dealing with reduced availability, so our supply is reduced - by up to 17%, we have said. That is a further issue we are dealing with. My hotel is 90% full. The city is very busy. That means we are talking about the last available rooms. Those rooms are what people are seeing. To answer the Senator's question about concerts and events, pent-up demand is huge. We have corporate business on the books that has been carried over from 2020 and 2021. It is the same with group business on our books. Members may see the tour buses driving around the country. Forty-five per cent of the tour bus customers in our hotels at the moment made bookings in those hotels that have been carried over from 2020 and 2021. That is putting extra pressure on our supply as well because we do not have enough space. That is all building up such that when we come into a new month we have fewer rooms we can sell. The example we gave in our paperwork was of a hotel with 80% of its business already such that it has only 20% left, meaning that it will probably finish the month at 94%, so all we are dealing with is 14% of its availability. If there is a concert on a Wednesday, either side of that will be very difficult. The demand might not be there to fill the week, so the hotel could end the month with 92% or 94% occupancy. That is the problem we have. It is total lack of supply. That is what is causing the prices for those last few rooms. As a trade association, we cannot comment on pricing, but I am not here to defend excessive pricing either. It is important I say that.

Senator Micheál Carrigy

I thank Ms Campbell for her comments. It is great in one way that we are having this discussion because two years ago, when we were having a similar discussion, we were looking at 2024 or 2025 as the year of the recovery of our tourism sector. It is good to see recovery now. I cannot understand the following, however. If a hotel bed on a Saturday night this September costs €150 per night and then Bruce Springsteen announces a concert and the cost of the bed goes up to €350, that is not right. We may need to look at legislation that will stop that. If something is advertised at a certain price, it should stay at that price. It should not increase in price just because a concert is announced, pricing people completely out of the market. Something needs to be done about that if the industry wants us to support the extension of the 9% VAT rate, which I know it does.

Ms Denyse Campbell

Yes, absolutely.

Senator Micheál Carrigy

I myself am involved in the tourism sector. I am involved in the tourism committee of my home county. We need tourism, but this issue needs to be addressed.

Deputy Brendan Griffin

I thank all our guests. I appreciate their taking time out to be with us at what is a busy time of the year for the industry.

In considering this issue, which is a source of immense frustration to many people, it is important we do not tar everyone with the same brush. That is one tendency when we have discussions about this. The entire industry gets painted with the one brush and differentiations are not made between various categories of accommodation provider. Certainly, geographical differentiations are made. I am a bit of an anorak. I spend a lot of time on booking.com, Trivago and so on just out of interest and to look at the prices, not because I am actually going places. I have a very exciting life. It is very clear to see that there is one location in this country where prices are just out of this world, and that is Dublin. There is great value to be got in other parts of Ireland. I should maybe be pointing out the good news stories more where there is excellent value to be got. Looking this week in my constituency, specifically Killarney, some really good four-star hotels have rooms for less than €150, including bed and breakfast. It is hard to imagine how people can sell at those prices, but those are the prices that are available. There will always be the lad who gets on to Joe Duffy quoting €6,000 for a week in a five-star hotel in Killarney. That sort of thing does nobody any service. It just distorts the argument. Whereas booking sites and engines are really useful for the industry, they are also a bit of a double-edged sword because they can throw up massive anomalies and ridiculous prices every so often. Nonetheless, Dublin prices are now consistently extremely high. They are really damaging to our reputation internationally. A differentiation has to be made between some of the independently owned hotels and the corporate hotels. That is the elephant in the room. There are people who are not thinking about next season or the following season and who are ruthlessly selling at enormous prices. We hear about them but do not hear about the independents and smaller groups that are doing their best and keeping prices at very reasonable limits. They do not make the headlines, and that needs to be factored into the discussion. We need to be fair when we talk about this.

The industry and all of us, as public representatives, should at this stage start naming and shaming those who are abusing the situation. I think it is the only way to go at this stage because everyone being tarred with the one brush is not helping anyone and is letting those who are abusing the situation get away. It is time now, therefore, to identify individually the abusers of the situation and to make those names public. That is the only way we will deal this. We can have all the discussions we like here and we can talk until the cows come home, but until we actually start going out there and identifying the people who are abusing the situation, we will be going around in circles.

I am very keen that we help address some of the costs, at least. In particular, energy prices, I imagine, are a huge challenge for the sector at the moment. I ask the IHF and ITIC representatives here if they feel there is anything in particular the Government could do about costs - energy, I am sure, is a huge one, but there are other costs - that is not being done?

Have the witnesses seen the benefits of insurance reforms start to accrue in respect of the premiums charged? Are premiums still increasing or has the rate of increase at least slowed?

A separate matter is the cost of rental cars. Is that impacting rural areas? It is another astronomical cost and is now getting very much close to name-and-shame territory. I think that that is the only corrective action we can take, apart from deregulating the industry to make way for an Airbnb for car rentals. Let us see how the Hertzs and the GoCars of this world and everyone else who is jumping on the bandwagon deal with that. Is that issue impacting rural hotels and accommodation providers?

Mr. Tim Fenn

I will take the question about insurance. The Government is making great progress on new legislation at the moment, but we have not seen any significant price reductions in the insurance market yet. In fact, our members are reporting increases of 20% still. That has been going on year after year. Insurance is therefore a significant challenge for us.

Nobody can really do anything about the price of oil, but hotels are big users of energy. Hotels' utility bills are significant costs. If I pass on to Ms Campbell, she may give the committee an idea of the kinds of implications we are talking about when we see those prices.

Ms Denyse Campbell

In the past week I spoke to two hoteliers, both in the south of Ireland, about energy. One hotelier's energy bill was €14,000 in March and it was €42,000 in April.

Another hotelier in Killarney told me the energy bill was €5,300 in March and in April it was €11,000. Exactly the same number of units were used in both months. There was no spike in usage month-on-month. There is much concern about the spiralling costs that our members are taking on. That is in addition to food and beverage inputs, which are increasing all the time. There is also a shortage of supply with some goods as well. The price of bed linen, for example, is an issue and some companies are charging hotels fuel surcharges in addition to increasing their costs. Hotels are dealing with spiralling costs, which is a major concern.

Mr. Eoghan O'Mara Walsh

Ms Andrews might speak to car hire but on a general point, the Deputy and other members mentioned some excessive prices, particularly in Dublin on concert nights or whatever. These are damaging to the broad tourism industry but are not reflective of the wider industry. It is important to state that. The tourism industry knows it is critical for value to be retained and maintained. In 2006, at the height of the Celtic tiger, Irish tourism became expensive and lost its value perception. After the great financial crash, global travel and tourism suffered, with Irish tourism taking much longer to recover because we had lost value. We understand the importance of value and it is frustrating for us to hear about some of the prices mentioned by the Deputy. For those late, last-minute availability rooms, on average the value of a room in Dublin and nationally is still value for money compared with international peers. It is something we must guard very jealously and carefully.

I will pass over to Ms Andrews because I am eating into the time but the 9% VAT rate is national and covers all tourism services. Punishing the industry on a national level for poor behaviour by a handful of hoteliers in Dublin would be very damaging to the recovery of Irish tourism as a whole.

Deputy Brendan Griffin

I was incorrect in referring to GoCar and I withdraw that remark. I stand by the comment on Hertz because I have looked at what the company is charging just because it can. It is not good enough. I describe it as economic treason. We are spending so much money marketing experiences like the Wild Atlantic Way internationally and then when people come to Ireland, the likes of Hertz have charges that are out of this world. They are not the only ones but it is time we start to name and shame these companies publicly. As I said, I referred incorrectly to GoCar and should not have done so.

Ms Ruth Andrews

It is certainly a challenge for the industry, particularly in terms of facilitating new business, which was going to be critical given the level of pent-up demand for inbound tourism. We needed availability of car rental stock but, unfortunately, there is a lack of stock, which is down by 50% on previous years. The car industry members of ITIC have made it very clear that the issue is even if they had tried to get their hands on additional stock for this year, it just was not available for all the reasons we know, including supply chain issues with post-pandemic production. Trying to get cars into an island destination like Ireland brings its own issues. We have right-hand drive versus left-hand drive, for example.

The Deputy made a point around pricing but it is not just about pricing. It is also about availability. In an average year, 40% of holiday visitors need cars to get around the country, so the Deputy is absolutely right in that it will be detrimental to the rural sector.

Deputy Brendan Griffin

At this stage, things are so bad we will have to do the equivalent of Airbnb for car rental. If somebody has a car and wants to make it available, we will have to find a mechanism for doing that. These companies are gouging beyond belief now. What is going on is absolutely unbelievable. Despite the constraints in supply, it seems the companies are still trying to achieve the same profits, which is just not right or acceptable. They were well looked after during the pandemic but here they are, at the first opportunity, gouging beyond belief. That is not right and must be stopped.

It would be great to hear Mr. Kelly's views on this from Fáilte Ireland's perspective. It has put in much work in trying to develop the experiences such as the Wild Atlantic Way, yet this is going on. On the back of room doors in hotels we can see prices and their limits. There must be a point at which Fáilte Ireland would intervene to prevent the types of prices we are seeing being charged from being applied to customers. What is Fáilte Ireland's limits or the extent of its powers in that regard?

Mr. Paul Kelly

I will address the second point first and come back to the car rental issue. As I said in my opening statement, we have no role in commercial decisions around pricing. Hotels and accommodation registered with us must submit a scale of charges as part of the register. What they put on that scale of charges is completely up to them. Hotels and other accommodation providers put up a very broad range of scale of charges so it does not limit their commercial decision-making down the tracks. We have found the scale of charges submitted to be so broad that even when there are concerts and other events on, we have checked to see if hotels stay within that scale of charges and they have done so. The scale of charges must be prominently displayed. They are no longer required on the back of every bedroom door like they used to be but they are now generally displayed at the reception.

Deputy Brendan Griffin

Is it sort of pointless? If the hotels put up the scale of charges and they decide to charge a multiple of that, there is nothing Fáilte Ireland can do.

Mr. Paul Kelly

If they go outside the scale of charges they have submitted, their registration could be at risk.

Deputy Brendan Griffin

How is that checked?

Mr. Paul Kelly

We do spot checks to see if properties are staying within the scale of charges. We have had no incidents of anybody going outside the scale of charges because the maximum price is set at a very high level to allow for all eventualities.

Deputy Brendan Griffin

I advise Fáilte Ireland to have a good look at the corporate groups. If somebody wants to set the maximum rate at €100,000 per night, there is nothing to stop Fáilte Ireland accepting it. Is that right?

Mr. Paul Kelly

They can put whatever they want on it. We have no legislative power to intervene.

Deputy Brendan Griffin

Are they putting astronomically high prices on the scale of charges?

Mr. Paul Kelly

I am not aware of anything at €100,000.

Deputy Brendan Griffin

They could put the maximum at €1,000 and there is nothing Fáilte Ireland can do to stop that.

Mr. Paul Kelly

Exactly.

Deputy Brendan Griffin

Does that arise from a statutory instrument?

Mr. Paul Kelly

It is as per the Tourism Traffic Act.

Deputy Brendan Griffin

Perhaps something could be done through a statutory instrument?

Mr. Paul Kelly

I will make a couple of points quickly. We have spoken about the core issue, which is the supply of tourism accommodation, particularly in Dublin. This is not just a Dublin problem because Dublin is the gateway for Ireland. If people cannot get the night in Dublin, we would lose the night in Kerry, Louth or Cavan. We would lose nights all around the country. The core long-term solution is supply coming to the market. I am not going to ask for a pro-business policy but rather a pro-development policy. Legislation and controls have been mentioned at this meeting. My real concern is that this would make the problem worse because it would slow and constrain the amount of supply coming in.

It was only in 2016 or thereabouts that it became profitable to build a hotel room in Dublin again. We had no development from the financial crash and this is still a hangover from then. We had no new stock being developed while tourism globally and in Ireland was growing exceptionally well, with all the other requirements for short-term accommodation.

Whatever actions or policies the committee or the Government considers, it is really important we facilitate supply. Unfortunately, there have been some voices against the development of hotels in Dublin but it is so important to the national tourism economy that we have a pro-development policy to allow more supply and stock. The core issue with Dublin arises with those nights spoken about by Ms Campbell, where hotels are at 92% or 94% capacity. That happens too often in Dublin. It only takes a concert or a match to push it to that position. The solution is more stock in hotels.

That is the long-term solution. In terms of any policies the Government is looking at, I would suggest it makes sure to encourage more stock to come on stream as opposed to putting off investors.

Deputy Brendan Griffin

In the meantime, I ask Mr. Fenn and Ms Campbell in particular to make it very clear to their members, in particular the ones who are abusing the situation - they know who they are - that this is not acceptable. Within the Irish Hotels Federation, IHF, action has to be taken. The vast majority of people are doing the right thing and are working in very difficult circumstances, coming out of an extremely difficult time, but that change has to happen as well. Just because someone can charge does not mean they should charge. The damage is going to be accrued by all of us. I believe that is something the Irish Hotels Federation can do arising out of today. Again, it only takes a small few to upset everything. What is going on cannot continue because it is going to destroy Irish tourism.

Deputy Johnny Mythen

I agree with most of what Deputy Griffin has said, and there are serious issues with car hire and so forth. It was mentioned during the conversation that it is a misperception that prices are high. I do not know how that could be because speaker after speaker has dealt with this issue. In my own area, for two nights in August for one person, the price is €460 and the prices in Dublin are phenomenal. How can the price of a last-available room be so high? It was said that the figures are being distorted but that is a fact. I spoke to a taxi driver the other day who was talking about prices in Dublin. He told me about four women who came over from Manchester for a weekend in Dublin and, on their way back, they said they would never come back to Dublin again. That is the situation on the ground due to the exorbitant prices people are being charged. We have to come to terms with what is worth what. People might gain for this year, but next year and the year after that, they are going to suffer. We have to address that issue.

The Department's briefing note outlined that some actions have been taken to address staff shortages. Do the witnesses believe the low wages in this industry are contributing to staff shortages?

Does Fáilte Ireland have criteria for businesses to use its logo? Does this include a value for money element? If not, could this be a way to address the overpricing in other areas? I would like to get an answer to those questions for a start.

Chairman

I call the Irish Hotels Federation.

Mr. Tim Fenn

What I was trying to articulate earlier was that the focus on the last-available room rates is not telling the full story about what is going on in the market. What we are trying to articulate today is that there is significant value out there. The challenge we have is that because there is a lack of supply, when we get down to those last few rooms, they are going to cost a lot more than one might want. When we look at the Dublin market out to next October, if someone was planning a trip for next October, there is plenty of good value, and it is the same in September and into August. The challenge we have-----

Deputy Johnny Mythen

Why should they cost so much?

Mr. Tim Fenn

It is a supply and demand issue.

Deputy Johnny Mythen

That is ripping people off. Mr. Fenn says it is supply and demand but if that is what people are being charged to book a room, it is still overpriced. It does not make sense. Does Mr. Fenn not see that the price should be averaged out and that this is doing damage to the industry?

Mr. Tim Fenn

If we were to have some kind of price control, and I am not suggesting that is the way it should be, and if all of a sudden somebody said that the maximum price in Dublin was the average price of €150 a night, then Dublin probably would have been sold out for June in the middle of May and there would be no rooms for anybody. We are trying to get to a stage where people understand the difference between what is happening in the market and what is being articulated around these last-available rates. We cannot add additional rooms in the short term. We have come through a very challenging time with the financial crash. As Mr. Kelly mentioned earlier, it was about 2017 or 2018 before anybody could actually build a room in Dublin because it was cheaper to buy distressed assets. We are now in a situation where, when we went into the Covid pandemic, there were perhaps 5,000, 6,000 or 7,000 rooms in the pipeline and they did not materialise, so we were down 3,000 rooms right at the start of this year. We are hoping that there might be another 5,000 rooms coming into the market by the end of 2024, and maybe more again as we go forward, but that is the real issue here. It is about the fact we do not have the availability. When some people also compare us-----

Deputy Johnny Mythen

In fairness, I would say the real issue is the price. It does not make a difference whether it is the last room, the first room or otherwise. If a person books a room for up to €700, they could have gone to Spain for that.

Mr. Tim Fenn

Again, we cannot make a comment on individual prices. That is a challenge for us.

Deputy Johnny Mythen

I know Mr. Fenn cannot comment on individual prices and we understand that. However, the Irish Hotels Federation has to recognise the reputational damage among tourists. If someone goes on a holiday and they are asked how they got on and how things went, those people are not going to say they had a fantastic time. They are going to say “Do not go there.”

Mr. Tim Fenn

We appreciate the comments that are being made on short-term and long-term pricing policies. The challenge at the moment is that pricing, whether it is good or bad, has led to Dublin being full. There are no more rooms available, by and large. In June of this current year, we would expect that occupancy will get to something of the order of 92% on average. There are plenty of nights where hotels cannot sell all their rooms and the day they do not sell a room, they cannot sell it the following night. It is absolutely jammed full for this month.

Deputy Johnny Mythen

Mr. Fenn said in his opening statement that full recovery will not be secured until 2026. What is this based on? Are there empirical figures for that? This year is obviously going to be a bumper year for the industry.

Mr. Tim Fenn

I am sorry but I missed the question.

Deputy Johnny Mythen

Mr. Fenn said in his opening statement that full recovery will not be secured until 2026. I wonder what that is based on or what empirical figures Mr. Fenn has for that. This year is definitely a bumper year.

Mr. Tim Fenn

I will pass the Deputy to my colleague. That is an Irish Tourism Industry Confederation, ITIC, estimate.

Mr. Eoghan O'Mara Walsh

That is an estimate that the Irish Tourism Industry Confederation has come up with. We look at it every few months and we recalibrated it relatively recently. It is actually overseas tourist numbers to Ireland that we estimate will not have recovered to 2019 levels, which was the previous peak, until about 2026, hopefully sooner, but I still think there are about three or four years to go. What we are seeing this year is very strong demand for a variety of reasons. One is pent-up demand in that, post-Covid, people just want to get out there and enjoy their holiday experience. Another is deferred demand, given there was an awful lot of business on the books in, say, 2020 and 2021 that ended up being transferred into this year. In addition, obviously, there are a lot of consumer savings as a result of Covid. If we like, we are seeing an artificial level of demand this year. We also have to remember that supply of hotel rooms in Dublin, for example, is down 15% to 17% for a variety of reasons. Next year, 2023, is going to be much softer and much more difficult because all of that pent-up demand and deferred demand will not be there and, literally, the clock will go back to zero on 1 January and we are going to have to win all of the business again. In terms of overseas tourism recovery, it is three to four years away.

Incumbent on that is Ireland remaining a really attractive holiday destination, one that offers really good experiences and really good value for money. Given this idea of late-availability, high-priced rooms in Dublin, we have to make sure that we do not lose the bigger picture, which is jobs right around the country. Tourism is the biggest regional employer and Deputy Griffin mentioned that one in six jobs in Killarney is tourism-related. We cannot damage the industry with short-term approaches, and that applies to both hoteliers, who should not be adopting a short-term approach, and the legislative bodies.

Deputy Johnny Mythen

The Department in its briefing note outlined some actions being taken to address staff shortages. Are low wages and long hours contributing to these staff shortages?

Mr. Bernard O'Shea

I might take that one. Fáilte Ireland carried out probably the most extensive research in this area last year and found pay was an issue, although other significant issues included, as the Deputy mentioned, flexibility, certainty regarding rosters, family-friendly hours and so on. In good news, the most recent research, through Fáilte Ireland's barometer, points to 71% of employers increasing pay and 69% of them offering more flexible arrangements for their staff. We acknowledge recruitment is very difficult throughout the economy. The representatives from Fáilte Ireland may wish to comment on the initiatives it has under way. It has an extensive programme to support employers with the issues they face.

Mr. Paul Kelly

As Mr. O'Shea outlined, significant progress is being made on how the industry is working to try to attract staff and address some of the insights regarding covering that research. We also have a programme to support the industry with recruitment campaigns and an excellent employment will launch later this year. They are all in train but, as Mr. O'Shea noted, it is very difficult.

The Deputy asked about Fáilte Ireland logos and so on. We make them available to all businesses in the sector to help them promote their business and that is the right thing to do. Particularly for accommodation businesses that are registered with us, they are properly registered accommodation businesses and, therefore, they should be afforded the right to use our logos.

I might return to an important issue raised by Deputy Griffin relating to the car rental sector. This is strategically an issue I am most worried about because people who rent cars in Ireland spend longer in Ireland and spend more money here. They visit places such as Wexford, Kerry and elsewhere throughout the country and they require rental cars to do that. The core economics of the rental car business in Ireland and the nature of the tourism business mean it needs to work economically for rental car companies to buy additional cars in March and then to sell them as second-hand cars later in the season. We submitted a report to the Department of Finance last year showing that some of the actions on how VAT and vehicle registration tax, VRT, are treated are making it exceptionally more expensive in Ireland to operate that model of being able to buy cars in March and sell them in October. The industry has certainly fed back to me that unless there is a change in the taxation model to facilitate that, when stock becomes available, it will continue to be uneconomical for car rental companies to increase their seasonal stock significantly, and that will damage tourism in Ireland on an ongoing basis. It is important, therefore, that we have the correct policy to suit the tourism need for rental cars because it is a supply issue and the more supply, the more competition and the more competition, the better the value.

Deputy Christopher O'Sullivan

As a rough figure, how many hotels in and around Dublin are members of the Irish Hotels Federation?

Mr. Tim Fenn

Most of them are.

Deputy Christopher O'Sullivan

There have been references to prices of €400, €500 and €600. Senator Cassells referred to €700 per night. I think every member of the committee compared prices online before the meeting. Would it be fair to say those prices are being charged by hotels that are members of the Irish Hotel Federation?

Mr. Tim Fenn

That is possible.

Deputy Christopher O'Sullivan

In that case, can the federation not try to rein in those excessive prices? Can it put out a request to members, for the sake of the reputation of the hospitality sector, to rein in those extortionate prices?

Mr. Tim Fenn

We can communicate to members the message from the committee, but the Irish Hotels Federation cannot send a message to the market on price. We will not break the law.

Deputy Christopher O'Sullivan

Mr. Fenn has repeatedly stated he cannot communicate with federation members regarding these extortionate prices. Can Ms Campbell do so as president?

Ms Denyse Campbell

Unfortunately, I am not in a position to do that either. It is challenging and, as we said, we are not here to condone the excessive pricing. The point we want to get across is that it relates to the supply issue at the moment. Deputy Mythen mentioned events. This year is a year like no other, as Mr. O'Mara Walsh noted, and it is important we do not lose sight of that. In 2019, there were seven concerts in the Three Arena; there are 13 this year. There are so many events and there is pent-up demand-----

Deputy Christopher O'Sullivan

I do not quite buy the supply issue and I will come to that in a moment. Our guests will understand why the members of this committee are so frustrated. We welcomed discussions with the IHF and its members earlier during the pandemic when we were calling for an extension of the employment wage subsidy scheme, EWSS, restart grants, Covid restrictions support scheme, CRSS, supports and a reduction of the VAT. We asked for that and all we are asking for is a gesture in return whereby some communication go to members of the IHF in the Dublin area, given that is where this is happening, that are charging extortionate prices to rein it in and stop it because not only are they are doing severe reputational damage to Ireland as a country but it is completely unfair on hotels in the regions.

I come from west Cork and I carried out a quick comparison on a hotel-booking website. In a region where there is between 80% and 90% occupancy, where people are still facing the same challenges of increasing prices, the prices were, for example, €130 in Schull, Baltimore or Bantry, all very popular tourist destinations. In Kinsale, the price is slightly higher, at €190, while in Clonakilty, it is €150. These were all the last available room prices, so the supply-and-demand issue does not explain the €500, €600 or €700 prices, and those businesses face the same costs. Can the witnesses at least accept there is reputational damage? I have not heard a comment from the IHF, in particular, on the reputational damage these prices being charged in Dublin are doing to Ireland as a country and to accommodation provides in those regions such as west Cork that are not charging extortionate prices.

Mr. Tim Fenn

I go back to the comment we made earlier. The average room rate in Dublin in April, at €150-odd, is competitive when compared with other cities in Europe. The challenge we have, which is different from other cities, is that we do not have the stock levels they have and that we have much higher occupancy rates than they have. If they had the high occupancy rates we have, they might face some of the issues we are dealing with today.

Deputy Christopher O'Sullivan

It is fine to talk about the average, but the headline room costs are what will grab people's attention and they are doing the reputational damage. As Mr. Kelly mentioned earlier in response to questions following his opening statement, there is going to be a deterioration in how people view Ireland in regard to its value for money. Mr. O'Mara Walsh referred to increasing costs for hotels and mentioned a west Cork hotel. I think I know the hotel he was talking about, where food prices increased by 20%, linen costs by 40% and insurance costs by 25%. Indeed, ESB prices have doubled, yet these hotels are not price gouging. In that hotel, a room can be booked for €150, not €500, €600 or €700. Dublin hotels are doing significant reputational damage, which will have an impact on areas such as west Cork. In fact, it is a double whammy for west Cork because the hotel and hospitality sector, which has increased its prices in line with energy and the cost of doing business, is going to experience reputational damage, while the punter from west Cork who is travelling to Dublin for a gig or a match will have to pay these €500, €600 or €700 prices.

Does Mr. Fenn understand that this has to stop?

Mr. Tim Fenn

We absolutely accept what the Deputy is saying. The challenge we have is around whether we can do anything to control price. What has to happen in Dublin is that we have to have sustainable growth of capacity. That is the core issue for us. Dublin needs to grow and the stock of hotel rooms needs to grow in order that we can cater for the demand that exists. That is the most important part of this. If we make any short-term policy changes that damage the potential for supply of room stock, that is not going to fix this problem at all.

Deputy Christopher O'Sullivan

Does Mr. Fenn accept that these extortionate prices in the Dublin area are doing reputational damage, and unequal reputational damage to the regions and places like west Cork?

Mr. Tim Fenn

What we are trying to say is that the focus on the last-available rates is very risky because that, in itself, creates a reputational damage. What we are trying to say here today is that it is not reflective of what is happening in the total market. When there are 22,500 rooms and we should have 42,000 rooms – who knows how many? - and when the media and political commentary is focused in on the last 500 or 200 rooms, that is the challenge. That is why we end up having serious reputational damage. We would certainly concur with that.

Ms Denyse Campbell

We will go back to our members with the Deputy’s feedback.

Deputy Christopher O'Sullivan

That is vital.

Senator Malcolm Byrne

I thank our witnesses. We have engaged with quite a number of them on different issues over the past year. All of us are interested in having a well-respected, good value tourism industry. I would echo many of Deputy O'Sullivan's concerns. Members of this committee, within our own parliamentary parties and elsewhere, went out on a limb during the Covid period and made specific arguments to support those in the hospitality sector, particularly those of us on the Government back benches. It is becoming increasingly difficult to justify. I do not think it is justifiable for the hotel sector that the 9% VAT rate continue. Quite a number of hotels are now causing serious reputational damage to Ireland's tourism industry. As Deputy O'Sullivan said, we want that message to go back very strongly to the members of the IHF. I heard what Mr. O’Mara Walsh said about rising costs. Every business is facing rising costs, but we know that not every business is increasing its prices to the level we see with some of the hotels, particularly those in Dublin. I know of hotels in Wexford that continue to be good value for money yet what we are seeing is price gouging by some hotels in Dublin.

Mr. Fenn mentioned that the average hotel price in April was €155. What does he reckon the average hotel price will have been for May and June?

Mr. Tim Fenn

The early indications are that the price in May could have been €175 to €177, which would represent a 15% increase on the equivalent month back 2019, but that is just an indication.

Senator Malcolm Byrne

I understand Mr. Fenn’s point about last-minute bookings, and colleagues have dealt with that. Let us say I was to look at booking a hotel in Dublin now for a date three months from now, namely, 15 September, which is a Thursday night. What does Mr. Fenn expect I should pay for an average hotel in Dublin in about three months' time?

Mr. Tim Fenn

I had a look at this yesterday. I asked myself where this is going to be in a few months, so I went to October, September, August and July. Without looking for the cheapest room, I was able to find pretty easily something between €100 and €110 for October. When I came back to September, it was €110 to €120. When I came back to August, it went to €130 to €140, and when I came back to July, it was €140 to €150. When I came back to June, it was a real challenge because of the fact hotels are booked out.

Senator Malcolm Byrne

I accept it is last-minute. Because I knew the focus was going to be on this, I looked at 15 September, which is a Thursday, and it is not a supply issue because there are over 120 properties available in Dublin across a range of the booking sites, and I went onto some of the hotels' own websites as well. There were some very good value bed and breakfasts and some hotels but most of the hotels were charging over €190. On my average, excluding bed and breakfasts and hostels, it was an average of over €220, and that is for three months out.

Like Deputy O'Sullivan, I do not accept it is entirely a supply issue, although there is a supply problem and I will come to that. I get that the IHF cannot be involved in telling the market what to do or anything like price-fixing, but it can send a very clear message. During lockdown, the Vintners Federation of Ireland and the Licensed Vintners Association sent out a very clear message to their members that they need to have respect for their customers and nobody should be breaking the Covid rules. We are not asking for the IHF to price-fix. We are asking it to say that the minority of hotels which are doing damage to the entire tourism sector, and not just to other hotels, need to cop on, frankly. It is having reputational damage. Mr. Kelly mentioned the survey. We have our own surveys in terms of listening to what people are saying. It is not just tourists; it is commercial travellers who are coming to us and talking about the costs for business. Given that those hotels are causing the damage, it is going to be very difficult for us to continue to argue for supports for the sector, which we want to do, when some IHF members are not playing ball.

I want to move on to the supply side because the points have been well made. I am interested in Mr. Kelly's point about the outlook for 2023. We are talking about a certain number of beds becoming available. Can Mr. Kelly sketch out where he sees us going on the supply side?

Mr. Paul Kelly

There are currently 22,300 rooms in Dublin that are registered with Fáilte Ireland. Between this year and next year, the pipeline is for an additional 3,500 rooms coming on stream, which is a significant 10% to 15% increase in the number of rooms, which is desperately needed. However, it is not enough and, in the long term, we will need more, as we have said time and again. It is a four- to five-year timeframe from when someone starts the process to when they open a hotel room. It is sometimes shorter if it is an extension and so on, but, generally, that is the timeline. It is very important that the approach that is taken facilitates that long-term development.

That is around looking at costs and giving businesses certainty, and it is around making sure that the developers and investment companies which are looking at investing can see that they can get a good return in Dublin, which is a higher-cost economy. It costs more to build a hotel in Dublin than almost anywhere else. It costs more to get money to build a hotel in Ireland than almost anywhere else in Europe. We are a high-cost economy so we have to make sure that those investors can get a return on investment.

The Senator is right that it is not just about tourism, and it is about business, about multinationals being able to have their staff coming over and back to Ireland, and about all of the other community needs that are serviced. As I said to this committee only in April, housing displaced citizens and asylum seekers in short-term accommodation is not good for them and is not good for tourism. As Mr. Fenn outlined, 17% of the accommodation stock has come out of Dublin to serve that purpose, for very valid reasons, including very important humanitarian reasons, and what we are seeing now is some of how it is not good for tourism. That is just one of those unintended consequences. There is more supply coming but we need even more supply again.

People speak about the VAT rate. Investors look at this. An increase in the VAT rate from what is in line with the European average and the competitors we are dealing with would not encourage more developers. It would put off developers. Given the current supply constraint we have, the likelihood is that any VAT increase would not decrease prices but increase them because once again it comes down to competition. We have to be realistic.

Mr. O'Mara Walsh made a point on the tourism economy. Revenue in hotels in Dublin represent 15% of the tourism economy. The other 85% of the tourism economy is revenue outside of hotels in Dublin. It is very important that blunt instruments that would impact towns, villages, businesses and viability are not used. This is before we even get to hairdressers and other services that are not connected. There is a core issue. It is easy to go for short-term fixes, but this is about building supply and facilitating and creating the conditions that will bring more investment and more hotels.

With regard to full hotels, it is very challenging when we have high prices. People are working in shops, cafes, restaurants and bars throughout Dublin who are delighted that the hotels are full. The offices are not full. It is very important that we do not lose sight of the broader economy. Full hotels have a benefit for the wider economy. We would prefer if they were not as full as they are. We would prefer them to be a little bit emptier so there is more competition and price competitiveness in the market. It is important that we bear in mind the positive economic benefit outside of that.

Senator Malcolm Byrne

It is ironic that some politicians and political parties who object to hotels being built now complain about a scarcity of hotel spaces. Are there other planning measures that would help to assist on the supply side? What does Fáilte Ireland hear from developers? Are there specific planning measures that could be taken? I hear about the time it takes when something goes to An Bord Pleanála. Are there other specific measures we could take?

Mr. Paul Kelly

Certainly, the length of time is an issue. I have to preface this by saying I am not a planning expert by any stretch of the imagination. All I can feed back is what developers and the industry tell me. They say that the length of time for planning in Ireland is longer than in other places where they might be building hotels. This put them off because time is money. There is a cost involved and this is a factor. Many people work incredibly hard in local authorities and An Bord Pleanála and I do not want to be critical of them. The length of time for planning is certainly an issue that is raised.

The availability of sites is a key issue holding back hotel development in Dublin. Dublin is not a green field; it is a built city. It is a challenge. The question to the planners is whether anything more can be done on more availability of sites and perhaps easing the height restrictions in more areas. Building a seven-storey hotel instead of a six-storey hotel creates a bunch of extra rooms that do not cost that much more to build but add a lot to the room capacity in Dublin. Issues such as these should all be looked at. As I say I am no expert but the right question to be asking is how we can facilitate this development.

Chairman

We have thrashed through a lot of the issues. I agree very much with my colleagues. I especially agree with what Deputy O'Sullivan had to say. I am looking at it from the perspective of a Border county and the Border region. I am thinking of Cavan and Monaghan which are not west Cork. The hotels, hoteliers, restaurants and pubs would give their right arms to have the problem that exists in Dublin. I concur with my colleagues that it really is not good enough to say the political perspective or the public commentary in this has been hugely negative with regard to the vastly expensive small number of rooms that are left. The point people are trying to make is that this small number of rooms is available but they are at a rate beyond most people's reach and they are not at the same rate as other rooms sold for the same night. This is what is upsetting people the most.

Mr. Kelly is so right that Dublin is the gateway to the rest of the country. If people cannot get into the country and have nowhere to stay, they will not come. This will have a huge effect regionally and throughout the country. I take Mr. Kelly's point. He is the one person who has come here today with very tangible solutions. We should be focused on solutions. I thank him for his contribution, particularly his interaction with Senator Byrne on the supply issue.

Mr. Kelly is also correct regarding car rental. We heard about this weeks ago and the problem still persists which is very disappointing to hear. If people have cars they can stay longer and they can go further afield to counties such as Cavan and Monaghan and beyond. What are Mr. Kelly's thoughts on this?

Will Goodbody had an interesting piece on RTÉ last night. He spoke to some tourists on the streets of Dublin who were coming out of the Guinness Storehouse. He spoke to people from the US who had resorted to staying in an Airbnb because they could not find an affordable hotel in Dublin city centre. Where is the incentive for them to come to the country in the first place or go beyond it? We could argue there is a big incentive to get out of Dublin very quickly because people will get value from money beyond it. I want to give Mr. Kelly an opportunity to expand on this idea. The impact it is having is catastrophic throughout the country. People cannot get into Dublin to stay overnight on the first day of a holiday or for the first couple of nights. Everybody wants to visit the capital city of a small island. Let us be honest, we are a small island. We are not the United States of America. We want people to come to the country.

Mr. Paul Kelly

It is important to note that overseas visitors plan their trips months in advance. As has been pointed out, we have an awful lot of business that was planned years in advance because 2020 and 2021 business has rolled over. Generally, it is rolling over at the rates agreed then. It is important to recognise this. Those rates were agreed with those businesses well before significant costs increase were introduced. Ms Campbell and Mr. Fenn spoke about 80% of June business being booked. A good chunk of this was booked in 2019 for 2020 at prices agreed long before. Businesses have to absorb all of the costs not only on the rooms they sell today but on all of the rooms they have sold. This is a factor.

The impact of the issue with the last available rooms on international visitors is much less than its impact on someone coming up for a match because the team just qualified for the next round of the all-Ireland championship. The vast majority of international business is booked well in advance. Visitors look at the rates and decide whether or not they are willing to pay it. We have one of the strongest recoveries in tourism.

The industry needs to be given great credit for its efforts in the context of the stresses and strains it has been under to deliver this recovery and to bring back as much employment as quickly as it can. That is across the whole tourism industry. We have this strong recovery and it is being driven by people who are happy and who have felt they have been getting value for the prices being paid. It is important we retain that value and those prices, because what people pay and what they see when they go to book something is what is going to be the ultimate perception of value. People are now looking at where they are going to go in the fourth quarter of this year. Internationally, that is what is being looked at now. There is value there in that regard. It is important to note that the year is not the three months of the summer. It is the full 12 months, and businesses have to operate-----

Chairman

To be honest with Mr. Kelly, however, up to now we have been hearing that we can expect the prices in hotels around Dublin specifically not to go down that much towards the end of the year.

Mr. Paul Kelly

As Mr. Fenn alluded to, the one thing hoteliers are very much aware of is they cannot sell last night’s room tomorrow. It is gone. They are acutely experienced at adjusting the price to fill their rooms. There is no revenue in an unsold room. If hoteliers are not selling their rooms, they will be very quick to adjust their prices accordingly. It is important to stress that because so much of the business happening now is deferred business, and that could be deferred holidays, postponed weddings or postponed business trips and conferences - demand that has been pent up because we are in incredibly uncertain times. Although it is looking rosy now for the next few months, there is great concern about the fourth quarter of this year and regarding bookings for next year, because things are just so uncertain. When we look at the pricing generally available throughout the country, this situation is reflected in that context. The core issue concerning the situation in Dublin is that it will not be as competitive because we do not have the supply of rooms. We still need more supply. From a tourism perspective, we need as much as possible of the tourism accommodation stock being brought back into use for tourism as soon as possible.

Chairman

I have one final question for Mr. Kelly, and he is brilliant with his facts. Regarding the vision, and he talked about 3,500 extra beds coming into the system, where do we need to be aiming at in the next 12 months? Mr. Kelly did say that was the figure and that it may not be enough. If he was to take an educated and informed guess as to what we should be aiming at, what would that be?

Mr. Paul Kelly

To be honest, the situation is so uncertain, as I said. Back in 2018 and 2019, we said there was a pipeline of 5,000 rooms and, from our analysis, that we also needed an extra 1,000 to 1,100 more rooms on top of that number. The situation has become so uncertain that it will not be predictable. There is no point in predicting what hotels we need next year or what rooms we need next year because nothing can happen with that. We must be predicting what rooms we will need in five years’ time and working as fast as we can to get to that position. That is how long it will take to open the rooms. We must take that long term view. I know it feels like that is a long way away, but we must take that long-term view and do everything we can to support, speed up and facilitate the development of hotels. If we do not do that, then more rooms will not be available. Regardless of the price, there will not be the rooms in Dublin to support the visitors who will be arriving and then going on to Cavan, Wexford or Kerry. Regardless of the price of the hotel rooms, the trends in global tourism are that it will not be the price that will be stopping visitors coming but the lack of rooms. We need the supply desperately.

Chairman

I suppose that, in turn, will push up the price further for those last few remaining rooms that Mr. Fenn was talking about. Turning to Mr. Fenn, I ask him for one final comment. In his presentation, he talked about spiralling operational costs. We accept this is happening throughout the country and it is not unique to Dublin, Galway, Cork or the big urban areas. There has been an increase in prices of 8% in energy, 18% in food and beverages, 30% in linen services and 20% in insurance. What would Mr. Fenn have to say about the fact that prices in Cavan and Monaghan will still be very competitive, even with all those increases?

Mr. Tim Fenn

What will happen in any such situation is that the hoteliers will try to do the best they can for their value proposition. Some of the costs increasing now will just have to be absorbed by the hoteliers. They cannot pass them on. The situation can be reached where some businesses that are marginal in respect of their profitability will get to a stage where they might not be viable anymore. That will be a challenge in some areas.

We are, though, trying to look to the positives. We are hoping, at some stage, that the price of oil will settle and that this rampant inflation will settle. We are hoping we will get to some form of calmer waters in future. The reality, however, is that we have come out of a pandemic that has been a disaster for our industry. We are in a situation now where there is a war in Europe and there are challenges globally on the supply side. This is in addition to the challenge I mentioned with rampant inflation. All those factors are disrupting everything going on now.

To speak to Mr. Kelly’s point, hotels are part of the infrastructure of the Irish economy. We are not just about tourism. The Irish economy has been progressing significantly despite the impact of Covid-19. There is massive demand in inward investment and in construction and all those industries use hotels. In parallel with that, we have a tourism industry that was asked to close. It was closed, more or less, for two years. When an industry such as this is closed, it is not possible just to turn it back on with a flick of a switch. What we are trying to explain today is that we have serious problems. We are not going to be able to fix them overnight, but we are doing the best we can. We want to speak to the fact there is still an industry out there providing stock that is, mostly, offered at competitive rates. It is comparable to our peers across Europe. There has been negative commentary about the last available rates. We are not here to defend that. We are not here to defend those rates.

Chairman

It is important to say that Ireland is a lovely and wonderful place to holiday and we still encourage people to do the staycation. That is important.

Mr. Tim Fenn

We must also be mindful that infrastructure is expensive in Ireland. We want to have sustainable growth in our industry. We want to build hotels in all parts of the country to support our wonderful product. This can only be done in a commercially viable way.

Regarding what is going on in Dublin, we know the limiting factors in respect of supply. There have been challenges around planning issues, the cost of building and the value of property, especially after the financial crash. Nobody can build a hotel, which might cost €300,000 per room, if it is worth €200,000 the day after it is built, because nobody, including the banks, will fund that type of proposition. Therefore, there is a whole raft of issues. There are some positives-----

Chairman

The industry is going to have them all solved soon.

Mr. Tim Fenn

Okay. Equally, as Mr. Kelly also mentioned, we estimate there was a shortfall of 3,000 bedrooms due to the pandemic. Some of the sites did not come to closure or did not finish up. We hope that about 5,000 bedrooms might come on stream by the end of 2024. It will go some way towards alleviating the shortage. We do not know, frankly-----

Chairman

Will that be 5,000 extra bedrooms in Dublin or nationally?

Mr. Tim Fenn

In Dublin.

Chairman

Okay.

Mr. Tim Fenn

Five thousand extra bedrooms will be coming on stream in Dublin. There is also the question mark over the Government contracts and whether that aspect will change. It is also important to state that when the pandemic happened, our industry turned to the Government and we asked what we could do to help. We helped with the emergency services. When the Government came to us on the outbreak of war in Ukraine, our industry put its hand up and asked what we could do to help. Nobody predicted at the time what was going to happen in respect of the recovery in the economy and in tourism. We are now caught in a situation where the real issue here is supply.

Chairman

On that note we must draw today’s meeting to a conclusion. I am sorry. I feel like I have not had a chance to ask Mr. O’Shea and Ms Gleeson anything, but we will have a second go in a little while.

I thank all the witnesses for attending what has been a useful and informative meeting. I appreciate their attendance and comprehensive presentations. I thank my colleagues for their questions and engagement.

Sitting suspended at 3.30 p.m. and resumed at 3.44 p.m.