The introduction of a hotel tax in Dublin would punish tourists for the council’s failure to provide services, according to a hotelier in the capital.

Dublin City Council (DCC) first floated the idea of a 1% hotel tax in January of last year – and the new ruling coalition is continuing to call for its introduction.

An internal DCC report has found that the tax could bring an extra €12 million a year into the city’s coffers and Fianna Fáil, Fine Gael, Labour and the Green Party believe the money could be used to reduce commercial rates for smaller businesses in the capital.

On the other hand, the Irish Hotels Federation (IHF) said last week that it would make Dublin less attractive to visit.

Hotelier and businesswoman Lorraine Sweeney said hotels have faced enough cost increases in the past year, such as the return to a 13.5% VAT rate – which extends to the guests. 

“Already we’re passing on all the increased costs in the tourism sector to our guests and I think this is just a step too far,” she told Newstalk Breakfast.

'Empowering' Dublin city

Green Party Councillor Janet Horner said the revenue from a hotel tax could revitalise Dublin.

The councillor said people talk “ad nauseam” about problems that make Dublin an “unattractive city” for tourists, such as dereliction and safety issues. 

“To fix a lot of these problems, we need a more empowered city council,” she said. 

“We can't expect it to just be the residents of the city to pay their way. 

“[A hotel tax] means we're not just charging the residents of the city, but the millions of people who enjoy visiting our city every year.” 

Shelbourne Hotel in Dublin. Image: claude thibault / Alamy Stock Photo

Ms Sweeney said Cllr Horner’s argument suggests DCC is not doing their job. 

“She’s right that the city is not good enough,” she said. “I see that the council is not doing their job. 

“The easy thing for them to do is just charge €12 million and punish the tourists for them not doing their job.” 

She noted Tourism Minister Catherine Martin has said the hotel tax is not a “straightforward issue”. 

“It should be for the Minister for Tourism and bigger bodies than Dublin City Council to decide this,” she said. 

Cllr Horner said primary legislation would be needed to introduce a hotel tax – and DCC is “committed” to getting it. 

“Our city deserves a lot better - we need to have an empowered city council, a funded city council,” she said. 

The Green Party, Fine Gael, Fianna Fáil and Labour now form the coalition in DCC and will be campaigning for the hotel tax. 

Similar charges exist in other European cities such as Venice, Lisbon, Barcelona and Brussels.