The Minister for Tourism, Sport and Recreation, Dr McDaid, has rejected a claim that the supply of hotel rooms in Dublin is starting to exceed demand.
He was responding to comments made by the chief executive of Dun Laoghaire-Rathdown Tourism, Mr Norman Duffy, who said many in the hotel industry feared that increased competition arising from a drop in demand for accommodation in Dublin would lead to a price war.
Such a development would "exert a vacuum effect on the outer areas of the region and indeed throughout the eastern part of Ireland", said Mr Duffy, who was launching a promotional brochure for tourism in Dun Laoghaire-Rathdown. This was a "genuine fear", he said.
However, the Minister said, "a damaging price war doesn't seem to be a serious threat at this stage. The yearly figures suggest that tourism growth is staying ahead of the growth in accommodation."
The Irish Hotel and Catering Institute said hoteliers were more concerned about the recruitment of qualified staff at all levels, and about wage inflation.
"This is probably a more immediate problem," said Mr Noel O'Connor, deputy president of the institute.
The supply of hotel rooms had increased by 15 per cent in the past year, Mr O'Connor continued. "Overall occupancy has dropped to around 70 per cent in the Dublin region, which is still very high."
Total market supply consisted of some 9,200 rooms, he said. "If the performance of the economy continues as it is, we should be able to meet demand."
Asked about the potential for a price war if the demand for rooms fell, he said: "I can't detect that this is a serious concern." The ability of hotels to survive a fall in demand would be determined by their individual management strategies, he added.
Dr McDaid said he "recognised of course" that the current market climate was "finely balanced." However, "the substantial investment in hotels is all private-sector investment and is market driven and is based on investors' confidence in continuing growth.
"Competition is always a commercial reality and I have often stressed the fact that every sector in the Irish tourism industry has to be ever-alert to an increasingly competitive international market."
