FORMER CEANN comhairle and Kerry South Fianna Fáil TD John O’Donoghue has warned Nama against closing hotels which have come under its remit.
The National Assets Management Agency has acquired 35 hotels, it is understood.
This weekend Mr O’Donoghue warned there would be under-capacity in the hospitality sector if Nama began closing hotels and this would “disincentivise” people coming to Ireland.
In March, economist Peter Bacon warned there was an excess capacity of between 12,000 and 15,000 hotel bedrooms. He said there had been a lack of “foreclosure against fundamentally insolvent hotel business” by the banks, which was undermining the viable hotels, and urged banks to recognise bad loans to hotels.
Mr O’Donoghue’s comments, on local radio on Saturday, have drawn criticism from some of the region’s leading tourism figures, where warnings of over-capacity because of tax-led accommodation developments have been sounded over much of the past decade.
The Kerry South TD, speaking on Radio Kerry, said he did not think Nama should have a knee-jerk reaction and start closing hotels.
“I don’t want to see a domino effect leading to a downturn in capacity where we actually disincentivise people from coming here.” He called for “constructive discussion” between Nama and hoteliers.
Kathleen O’Regan-Sheppard, a director of Cork-Kerry Tourism until recently and a former president of the Irish Hotels Federation in Kerry, said “some politicians appear to be living in a parallel universe to the rest of us”.
“It has literally become a race to the bottom with rates. This is not sustainable in the longer-term. There are no profits to allow for repairs and renewals and, in many cases, existing overheads cannot be met.”