Hotels will not be so hospitable to tax proposals

Much as with any industry, Dublin’s hotels are unlikely to be too accommodating to any new tax. Talk of their bête noire – the dreaded “transient visitor levy” – has re-emerged from the almost-dead this week. The hotel sector is, for once, not so welcoming.

“There are no grounds for introducing an additional tourist tax,” the Irish Hotels Federation (IHF) said in an unequivocal position statement. “The last thing we should be doing is to be increasing taxes further and making Ireland less attractive.”

The capital’s four local authorities are preparing a working group, expected to be in place by September, to develop a proposition for the charge and to bring its pitch to Government for the advancement of requisite legislation.

It is a complicated debate. On the one hand, the local authorities’ view is that Dublin is a relative outlier in not having such a charge. They argue tourists respect paying their part for a city’s upkeep, and councils need more freedom to raise revenue.

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On the other hand, hotels say the sector already pays enough in commercial rates and levies (about €25 million annually in the city area alone) and visitors should not be punished in a self-destructive pursuit to render the city less competitive to the discerning tourist.

And aren’t visitor numbers already on the wane, they will argue on the back of recent Central Statistics Office data showing a 30 per cent year-on-year decline in February as part of a continued slump.

As executive and elected members of the four local authorities prepare to meet, intense lobbying is certain to commence, political buy-in being a central aim of the new working group.

We have been here before. In 2022, the Tax and Welfare Commission proposed just such a charge for every night visitors spend in the State as a contribution to services they use but don’t pay for.

Even then, Paris, Berlin and Vienna were cited as capitals where visitors were likely to have to dip a little deeper into their pockets. From next year, Edinburgh joins the growing list of cities asking them to cough up – its council hopes to raise the mind-boggling sum of almost €120 million in just three years.

Such a levy would likely be paid directly by the visitor – and not by the hotel – based on a flat rate or percentage cost. So why should the sector care given its ability for distance?

“Placing the burden of additional taxes on international or domestic tourists, particularly at a time when we are trying to make Ireland stand out as an attractive destination for visitors, makes no sense at all,” the industry says. And no doubt that simple message will soon be delivered to TDs the length of this tourist-loving island.