The expense of Dublin hotel rooms during big events is not unusual with cities across the world typically exhibiting similar pricing patterns, a report examining the potential for so-called price gouging in the sector has found.
“Many hotel markets, including Dublin’s, simply struggle to facilitate the extra demand pressure that comes with large-scale events,” the research found.
Commissioned by Fáilte Ireland, the study was undertaken by business advisory firm Crowe on the instruction of Minister for Tourism Catherine Martin last year to examine the scale and frequency of spikes in hotel prices when demand is high.
She was responding to questions around the notion of “price gouging” and re-advertising of hotel rooms at far higher rates following the announcement of big events.
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However, the report found Dublin to be broadly comparative to other European destinations, and unable to easily absorb intensive demand.
Room rates on concert nights had attracted media and consumer attention, it noted. For example, for during Bruce Springsteen’s May, 2023 concert in Dublin, occupancy surpassed 90 per cent and average daily rates (ADR) were above €250.
On the same night the following week, occupancy was down to 83 per cent and ADR was €200. “Dublin is not atypical in this regard,” the report said.
“For many hotel markets, including that of Dublin, available hotel stock cannot facilitate the extra demand pressure that comes with an event of such magnitude.” Room rate premiums during big events are found in cities across the world.
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Dynamic or “surge” pricing — when rates are adjusted to reflect market conditions including supply and demand, the cost of production and competition — was first encountered in the airline sector, but is commonly used in accommodation.
Rates quoted in the media, the report notes, are usually for those booked at short notice for a big event, among exceptionally high demand. “While the pricing of the last remaining rooms can be headline-grabbing, the vast majority of rooms,” are cheaper, it said.
Drawing on CoStar data, which looks at net rates, the report said Dublin was commonly benchmarked against Belfast, Edinburgh, Amsterdam, Berlin, Copenhagen and Prague. Dublin holds a similar ADR to Amsterdam and Edinburgh.
Since 2019, Dublin’s ADR growth rate of 29 per cent was similar to Berlin (25 per cent) and Amsterdam (24 per cent), and “notably slower” than Edinburgh (44 per cent) and Belfast (38 per cent). Copenhagen was the slowest at 7 per cent.
During 2023′s high season, Dublin experienced a higher volume of “compression nights”, when supply struggles to meet demand, than all the other comparative destinations.
The report said any introduction of price controls could have unintended consequences such as market distortion, a reduction in the supply of rooms and disincentivising investment in hotel stock. “Incentivising supply is a long-term solution,” it said.
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