The annual Crowe Horwath hotel industry survey has revealed that in the past year, Dublin room rates have risen to almost twice the cost of accommodation in the rest of Ireland, surpassing the prices of the last boom.
The study showed that the average room rate in the capital is currently at a record high of €128, which represents a €16 increase on last year's €112 and a rise of €7 on 2006's previous record breaking €121, reports The Irish Times.
The current average national room rate, including Dublin, was found to be €104, with the average rate in the midlands being up 8.6% to €91.40 and the average southwest rate rising 10% to €93.25.
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Dublin occupancy rates are also soaring at over 82%, while average occupancy in other parts of the country reaches up to 69%.
Commenting on the above data, Crowe Horwath partner Aidan Murphy said that competitiveness in the capital's hotel market is being eroded. He also expressed skepticism about Fáilte Ireland's recent assertion that Dublin's hotel room stock will rise by 5,000 by 2020, stating, "I think it will take up to 24 months longer than that to deliver what is needed."
Murphy went on to comment on calls from industry representatives to retain the special 9% VAT rate extended to the hospitality sector, saying that a change in the current rate would discourage potential investors and impede efforts to increase capacity. Additionally, he declared that hotels require higher profits to stimulate further building.