IHF Raises Concerns Over Hotel Development Levy As Short Lets Face Clampdown
Dublin’s long-running hotel room shortage is facing fresh pressure just as the city attempts to grow tourism and attract more international business travel, with industry leaders warning that new taxes, higher development levies and planning delays could further restrict the supply of accommodation.
The debate comes after Dublin City Council announced it had approved a significant increase in development contributions for new hotels, hostels and aparthotels, prompting warnings from the hospitality sector that investment could be pushed elsewhere.
The Irish Hotels Federation has argued that rising construction costs and planning delays are already preventing thousands of rooms from being delivered, while research cited by the sector points to a national shortfall of between 10,000 and 15,000 hotel bedrooms by 2031.
Those concerns intensified in June after Dublin City Council approved a doubling of development levies for new hotels, hostels and aparthotels. The charge will rise to €22.67 per SF from July, potentially adding millions of euros to development costs.
“Doubling this charge sends the wrong signal at the worst possible time. The cost of delivering new hotel capacity is already prohibitive, and projects right across the country are stalled as a result,” Irish Hotels Federation Chief Executive Paul Gallagher said in a statement.
Tourism spending in Dublin has continued to grow, and the government has launched work on a national tourist accommodation strategy amid concerns about future capacity, but the proposed hotel levies plus a proposed clampdown on short-term holiday lets has left many concerned that there will not be enough rooms to house an influx of tourists.
A draft government report has indicated that there are 28,903 short-term lets in Ireland. About 40% of these are in cities, with Dublin accounting for 9,186 short-term lets (32%).
Under proposed new rules, no new planning permission will be provided for short-term lets in towns with a population of more than 20,000, which will hit Dublin, Cork, Limerick, Waterford and Galway cities as well as 20 other towns.
Against that backdrop, Ronan Group and Staycity Group have secured planning permission for a new 288-room Wilde aparthotel at Waterfront South Central in Dublin’s North Docklands. The eight-storey development will be Ireland’s first Wilde-branded property and is expected to open in 2029.
The project forms part of the wider 4.6-acre Waterfront South Central scheme, which also includes Citi’s new Irish headquarters, additional commercial space and 550 homes. For Staycity, the approval marks the introduction of its premium Wilde brand into the Irish market.
“Securing planning permission for our first Wilde at home is a landmark moment for Staycity Group," Staycity Chief Development Officer Andrew Fowler said in a statement.
"Dublin’s North Docklands is one of Europe’s most dynamic business districts, evolving into a vibrant lifestyle area, and Waterfront South Central is an exceptional setting for the Wilde brand."
