Cantillon: time for hotel industry to pay its own way

Playing the poor mouth has always been something of a national sport in this country.

However, it has become significantly more difficult for the Irish hotel sector to play that particular card in recent times as prices and revenue per hotel room climb out of the doldrums. This is being helped in no small part by the failure to build any new rooms in recent years.

Nonetheless, at its recent results presentation, Pat McCann (pictured), chief executive of the State's largest hotel management group, Dalata, said that prices would need to rise higher still before necessary investment would be forthcoming.

According to a new report from PricewaterhouseCoopers, that is exactly what is going to happen, at least in Dublin anyway.

Having reported the highest growth in revenue per room (RevPar) last year at 23.3 per cent, the capital’s RevPar growth this year will be beaten only by Rome which is hosting a holy year. The PricewaterhouseCoopers report projects that in 2017, it will again top Europe’s growth league.

Room rates in Dublin hit an average of €111 last year. That compares with €77 back in the dark days of 2010.

Those rates are expected to top €120 a room this year and head to more than €130 in 2017, which is back to the levels seen at the peak in 2007.

Occupancy in Dublin is among the highest in Europe at 82.3 per cent; only London fared better than that last year.

And all this while availing of the largesse of the State by way of a reduced 9 per cent rate of VAT.

After a general election when it has become abundantly clear that there is a need to widen the general feeling of recovery, it would be unlikely that the booming hotel sector would not shortly be asked to stand on its own feet so that exchequer resources can be diverted to other, more pressing areas.