Tourist Accommodation

9. Deputy James Geoghegan asked the Minister for Enterprise, Tourism and Employment for an update on any engagement he has had with stakeholders, including hospitality and local government sectors on the introduction of an accommodation tax-levy. [66683/26]

I ask the Minister for an update on any engagement he has had with stakeholders, including hospitality and the local government sector, on the introduction of an accommodation tax or levy.

I thank the Deputy for the question. The introduction of a visitor accommodation levy was proposed in Foundations for the Future, the report of the Commission on Taxation and Welfare, published in September 2022 and more recently in Capital City, the report of the Dublin City Taskforce, published in October 2024, specifically for Dublin city centre. In the case of the latter, the proposed levy was presented as part of the funding mechanism to support implementation of the actions in the Dublin City Taskforce report. The programme for Government commits to implementing the Dublin City Taskforce recommendations and to apply the task-force model to other cities, towns and regions in need of revitalisation. The interdepartmental group on the Dublin City Taskforce report, which is led by the Department of the Taoiseach, published its report and accompanying roadmap in June 2025 and these provide a course of action to implement the task force’s recommendations. An oversight board led by the Department of the Taoiseach, with broad representation from across Government, was established to oversee the implementation of the roadmap and associated actions. The board established a financing subgroup to consider and report back on a number of funding mechanisms, including a visitor accommodation levy, to support the implementation of the actions from the Dublin City Taskforce report. I understand that both the oversight board and the financing subgroup have met on a number of occasions throughout 2025 and 2026. To date, a proposal for an accommodation levy has not been submitted to Government for consideration. Through my regular engagement with industry representatives, the issue of an accommodation tax or levy has arisen periodically. The principal concerns highlighted by stakeholders have centred on its potential impact on visitor numbers and the additional administrative burden that such a measure could place on accommodation providers. Given the significant contribution of inbound tourism to Ireland's economy supporting employment, regional employment and economic activity across both urban and rural communities, any proposal to introduce an accommodation levy would require careful and balanced consideration. This would need to include a comprehensive assessment of its potential implications for Ireland's tourism competitiveness, visitor demand and the long-term sustainability and resilience of the sector.

I thank the Minister. I agree with his last point. Clearly, it is the case that if we were to ever introduce an accommodation levy, there would have to be a proper examination of the impact on competitiveness. Understandably, on the local authority side and the Dublin side, they are more focused on what the revenue could bring for the city. Perhaps there has not been enough focus on what the impact would be on the sector itself. At any of the engagements I have had with the hotel sector when it hosts its events in Buswells, it is about making clear that any levy would be beneficial to the hotel sector, particularly in Dublin city, which is absolutely booming. There are record levels of investment in the hotel sector. It would have to be beneficial to the visitors who stay in their hotels but generally beneficial to the city. There are ways to address the administrative issue. In Edinburgh, there was a refund on the percentage of revenue that was being generated that went right back to industry so that the cost was not borne by business. That would be exceptionally important were we to introduce this. The benefits for the city could be quite significant were a tax like this to be introduced.

I thank the Deputy for his response. I will point out one or two things. From my 13 years of experience in private practice as an accountant and from studying tax, one of the key things I always have in my mind is that I would never introduce a tax when a sector is reducing in numbers. That was the case in 2025. If we remember back to before we brought in our tourism strategy, A New Era for Irish Tourism, visitor numbers and visitor spend were going down and, by default, I would never introduce a tax against that backdrop. In 2026, we have seen a significant increase. Numbers are going up well. We saw 626,000 visitors from foreign countries in July alone. It is up 5% on 2025 and about 3% on 2024. Critically, we will be considering this right across Government but I want to be very clear that at this point in time, we have about 38,000 hotels in planning. For the viability of those to work out and for them to be delivered, we have to be careful about what new taxation measures we bring in. We have to get the backdrop right and, hopefully, with the tourism policy we will keep increasing our numbers at the moment.

I thank the Minister. I take every point he is saying. I am heartened that the strategy the Minister is implementing is working. More visitors are coming to this country. This has to be looked at from a Dublin-centric view, to put it simply. There is a different market in terms of the investment horizon for hotels in Dublin compared to other parts of the country. Obviously, any law made in these Houses that would permit a local authority to introduce an accommodation levy would have to be mindful of every region in the country and ensure there is balance. We would have to ensure that for any local authority that introduces the levy, it would be in an area where tourism is thriving and would not act as a disincentive for the tourism industry. On the revenue side, and what we could do for Dublin city with that level of investment, the implementation of some of those recommendations of the task force would be quite significant.

I thank the Deputy for his important contribution. I know he was central to the Capital City report and he wants to see investment. I share that vision with him. Local authorities also need to demonstrate responsibility. Many local authorities have revenue raising powers they do not use. Some actually cut funding and shirk their responsibility. The one key thing is I do not want to see a mechanism of taxation being seen as a soft touch to bring forward a funding stream that can be lost. We have to bring forward a body of evidence. I absolutely share the Deputy's ambition through the report. I am happy that tourism is in a better place so we can consider options like this whereas in 2025, I would have had a very different view on considering them. At least we can move forward and try to achieve the aspirations in the report to have a strong capital city, which is in all our interests. I know the Deputy does so much on driving forward support for the Dublin City Taskforce. Hopefully, we can together ensure it has a viable funding mechanism to grow and breathe life into the recommendations of it.