Dublin City Council Doubles Hotel Development Levy to €244/sqm, Irish Hotels Federation Criticizes Move

Dublin City Council has doubled the development levy on new hotels, hostels, and aparthotels, a decision that has drawn criticism from the Irish Hotels Federation. The local authority voted last week to increase the levy to €244 per square meter, effective from July 1.

This revised contribution scheme, agreed upon on June 8, stipulates that hotels, tourist hostels, and aparthotels will be charged at twice the commercial rate. For a typical 20,000 square meter development, this increase is projected to raise the charge from €2.5 million to €5 million.

Paul Gallagher, Chief Executive of the Irish Hotels Federation, stated to RTÉ News that doubling the charge «sends the wrong signal at the worst possible time.» He emphasized that the cost of developing new hotel capacity is already prohibitive, leading to stalled projects nationwide. In March, Green Party councillors advocated for this increase, with Councillor Michael Pidgeon asserting that making hotel construction more expensive would «direct more money towards house building.»

However, the Irish Hotels Federation countered that industry analysis for this year indicates a national shortfall of 10,000 to 15,000 hotel bedrooms by 2031. The federation highlighted Dublin's role as the primary entry point for international visitors, arguing that constrained hotel investment in the capital would negatively impact national tourism targets. Mr. Gallagher concluded, «If we are serious about meeting our national tourism targets, it makes no sense to double a major upfront charge on the very accommodation those targets depend on.»