From 1996-2008 Irish Hotel rooms went from 26,000 – 64,500 + 150%. Tourists increased by 70%. Tourist numbers fell 2008 and will fall 2009.
84 new hotels opened 2008.
Developers given tax breaks of 15% write off against cost of Hotel construction. This was changed to 4% per year for 25 years in until it phased out in 2006. 217 Hotel applications where lodged in the run up to Christmas 2005.
So a Hotel is not doing well why not close it?
If a Hotel closes down within 7 years of been built the revenue is entitled to get tax breaks back. So I close down my Hotel and owe even more money.
It is very easy to be wise afterwards. The amount of Hotels in Ireland is more then is needed. Tax breaks were great to improve the quality of our Hotels. Ireland now has a great Hotel product.
If we are to be honest some hotels that opened did not make money even in the boom. Location, Location, Location. It may be the case that that some developers where doing so well on other projects they could absorb the hotel losses. This has changed.
The IHF has called on the Government to allow Hotels to close and not have to pay back the tax breaks.
Maybe it would have been better to call for an end of the tax breaks earlier. 150% more rooms v 70% more tourists even during the boom. Then again as I said it is easy to be wise later.
Tags: irish hotels
2 Responses to “Irish Hotels over supply made easy”
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I’d say a big impact of this has been on the B&B sector. In a similar way to how tax-incentivised student accommodation has wiped out the “digs” style of accommodation, the growth in the hotel sector has surely had a massive impact on B&Bs?
I would agree Damien. A lot of time now you can get a better deal for a 3 star hotel then a B&B.