Pat Casey (Fianna Fail) | Oireachtas source

Over a long period of time, accommodation has been driven by supply and demand. That is the main driving factor in that regard. This principle is leading to the high cost of accommodation. A few other factors are driving demand. Given the way the hotel sector is at present, we have only 62,000 hotel bedrooms available in the country. More than 42% of them are in four- and five-star hotels and only 32% are in two star or lower. The viability of budget hotels is very challenging in Ireland because of their high capital and operational costs.

The second factor having a significant impact on that is the refugee crisis, where more than 8,500 hotel bedrooms are being used as accommodation. They are being taken out of the two- and three-star hotel markets. Some 42% of the lower budget market has been taken up as refugee accommodation. That is adding to demand and driving up the price.

The number of entire homes on short-term lettings is an issue. The latest Fáilte Ireland report states that 13,780 homes are being let short term. That amounts to almost 40,000 bedrooms and is nearly 50% of the total stock of hotel bedrooms. They are unregulated and uncontrolled, and something needs to be done.

We need an honest debate around alcohol and it needs to be held in the context of public health. A number of European countries have adopted a two-tier VAT regime on alcohol in respect of on-sales and off-sales. We all know it is much better for alcohol to be consumed in a controlled environment than an uncontrolled environment. I refer to the excise from alcohol sales in 2020. When most pubs and hotels were shut and no concerts or events were held, the drop in sales from 2019 to 2020 was only 2.5%. That is significant considering the hospitality sector was closed down.

I would have preferred a discussion about the VAT on food, accommodation and alcohol and a more intense discussion on where VAT is within the whole hospitality sector going forward. I appreciate the Minister for coming into the House and taking this debate. I thank him for giving of his time.