President of the Irish Hotels Federation Stephen McNally has said price rises in Dublin hotels are necessary to attract in the city.
Speaking on RTÉ's Morning Ireland, McNally addressed the issue of rising room rates in the city and Tourism Minister Paschal Donohoe's warning to the hospitality sector about the special VAT rate.
This week, Minister Donohoe said that the special nine per cent VAT rate will remain as long as hotels, bars and restaurants don't return to the high prices of the boom years.
McNally acknowledged the importance of maintaining attractive prices for customers, but also emphasised that a balance must be struck in order to attract new investment into the city.
Dublin is currently the second most popular city in Europe in terms of occupancy, but 14th for prices. Prices must rise to increase the number of rooms through new investment, he said.
A recent survey revealed that 5,000 extra hotel rooms need to be created in Dublin over the next five years to cater for demand as occupancy rates reach their highest since 2007.
McNally said that will an increase in prices was necessary, hotels must be aware of discouraging people to visit the city.
