Tommy Broughan (Dublin North East, Independent)
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16. To ask the Minister for Transport, Tourism and Sport if he will report on the increasing cost of renting hotel rooms; if he intends to address these increased costs given their possible negative impact on tourism figures and given the special low rate of value added tax for the hospitality industry; and if he will make a statement on the matter. [31807/15]

Paschal Donohoe (Dublin Central, Fine Gael)
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The improved viability of the hotel sector is very welcome not least because it is a large employer and significant contributor to the economy.  Giving the tourist a good value for money product has been key to the turnaround in tourism performance.  Having survived difficult times, accommodation providers are entitled to a fair return on investment and, overall, Fáilte Ireland analysis indicates that our hotel prices still compare favourably to those of our international competitors.  However, increasing returns must be done at an appropriate rate and in a sustainable way that visitors perceive as reasonable and does not jeopardise the recovery.

The Government has introduced a range of measures to enhance and sustain Irish tourism's competitiveness and help regain our reputation internationally as a good value destination.  Encouragingly, Fáilte Ireland research shows a very significant improvement since 2010 in overseas visitors' perception of value for money in Ireland.  However, we cannot become complacent about this improvement in the tourism sector and in hotel performance.

It took the combined efforts of Government and the tourism industry to rebuild competitiveness and consequently grow business.  We must be constantly aware of how badly our visitors' view of value for money deteriorated over the past decade.  To keep on growing in a sustainable way, we must continue to offer memorable, good quality, good value hospitality to our tourists.  If the sector does not strive to remain competitive and offer value to the visitor, it will not only risk losing the gains it has made but also make it very difficult for Government to continue to support tourism the way it has, when so many other sectors also seek support.

As regards recent rises in room rates, the hotel industry is no different to other sectors regarding the economics of supply and demand.  Rates tend to rise at times of high demand, when supply is constricted, whereas the best value tends to be secured off-peak, mid-week or when booking well in advance.  In this context, I am aware of emerging accommodation capacity constraints,  in particular in Dublin, which will need to be addressed over the coming years if we are to remain competitive.