Tourism Needs 11,500 Hotel Bedrooms

A report commissioned by the Irish Tourism Industry Confederation estimates that there is a deficit of 11,500 tourism bedrooms in the state if Ireland is to meet projected demand over the next decade.

The report, carried out by economist Jim Power, says that the price of sites, allied to construction inflation, makes new builds cost-prohibitive apart from selected urban hotspots, and Government will have to intervene with a range of policy measures to stimulate developments.

The report partly bases its projections on estimates for growth in overseas tourism numbers, which is expected to reach 13.2 million annual visitors by 2032. This is up from a previous high of 9.7 million international visitors in 2019, when there was an estimated 60,000 tourism beds in the country.

Using 2019 as a baseline, and accounting for projected increased visitor numbers, an estimated 5,500 bedrooms would be required in the next decade. However, when a natural attrition rate of 1 to 2% of rooms per year is applied, it suggests a loss of 6,000 tourism beds in the next ten years.

The report concludes that it is “reasonable to assume” that 11,500 additional beds would be required to meet demand in the coming decade.

High build costs, the price of land and the high cost of capital are acting as a drag on hotel building at the moment, with the bulk of the activity confined to the cities of Dublin and Cork.

A recent report from consultants Cushman and Wakefield estimated that 3,600 hotel rooms are forecast to be delivered to the market in the coming years but that 84% are destined for the Dublin market.

The paper says the Government's “over-reliance” on tourism accommodation to house refugees and asylum seekers has exacerbated the tourism accommodation shortfall.

The report also identifies the Midlands as the region with the most acute deficit, with only 5% of national tourist bedrooms. It says plans to develop the region as a tourism destination with the EU Just Transition Fund would be seriously undermined in the absence of additional accommodation provision.

“In the absence of additional accommodation provision in the region, the Midlands will remain a transit zone rather than a touring zone, to the severe detriment of local economies throughout the region,” Elaina Fitzgerald-Kane, Chair of ITIC, warned.

The report suggests a range of policy measures including tax incentives, capital allowances and public-private partnerships to stimulate developments throughout the country.

Eoghan O'Mara Walsh, CEO of the Irish Tourism Industry Confederation, said there was a plethora of issues conspiring against the delivery of stock which was exacerbating the problem.

“Ireland needs more hotels to both moderate price and meet projected demand. The price of sites, allied to construction inflation, makes new builds cost-prohibitive apart from selected urban hotspots,”  he said.