A small tax imposed on those staying in hotels would benefit Dublin’s tourist destinations, a Labour councillor has suggested.

A number of hotels in Dublin and elsewhere have been in the limelight in recent days following reports that bookings were being cancelled and re-listed at a higher cost for Oasis comeback shows.

Labour Cllr Dermot Lacey is proposing a €1 tax on hotel bookings across the capital to boost Dublin City Council’s finances.

“This hotel tourist levy, call it what you will, is simply part of a reform of financing that we would like to see,” he said.

“It’s a fair tax if you look at the Coldplay concerts, hotels putting up their prices, the tickets going for phenomenal prices.

“We’re talking about a €1 hotel tax on average across the city that people would pay and we’re committed to putting that money into mutually beneficial areas so that Dubliners and tourists alike would benefit from it.”

Flawed model

Cllr Lacey said the current local authority financing model is flawed.

“The principal [flaw] is that the Government should pay rates on Government properties,” he said.

“We have this appalling situation in Dublin where every shop, every commercial company has to pay rates on their premises to the local authority but the Government absolves itself of the duty to pay rates, which means Dublin City Council loses about €30 million a year from rates.”

A man checks in at a hotel reception. Image: Kzenon / Alamy Stock Photo

Westport Woods Hotel manager Michael Lennon doesn’t think a hotel tax is fair.

“I think hotels are already making a significant contribution to both central exchequer funds and local authority taxes,” he said.

“There are no grounds for any additional tax to be put on Irish consumers and particularly overseas visitors because we're out there looking for as many as we can get into the country.

“We're already being hit with Dublin Airport, not alone with a cap, and putting more taxes on hotels is going to hinder growth.”

Fair share

Mr Lennon said the industry is paying its fair share already.

“We’re contributing over €2 billion a year to exchequer funding and last year we were hit with an increase of 50% to the VAT,” he said.

“That’s worth, I think, about €560 million to the Department of Finance, Government coffers.

“That money has to be shared around and rightly so, but any other extra tax isn't fair on our businesses.

“€1 a night per room will contribute to a 100-bedroom hotel, which will be €700 a week."

He added that a small tax can accumulate into a significant amount over the course of a year.

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Main image: A man checks in at a hotel reception. Image: MBI / Alamy Stock Photo