‘Swift’ spike in price of Dublin hotel rooms
Post covid, the entertainment and music industry made an epic comeback with many artists and performers announcing world-wide tours. Fans have travelled far and wide to experience these live performances. We are now witnessing significant upticks in demand for hotel accommodation on these event dates and hotel prices have skyrocketed, as the price of a room temporarily spikes during these periods. These price hikes have attracted much criticism and calls for government intervention. Denis Desmond, the co-founder of MCD Productions expressed his concern to the Irish Examiner in early 2024.
“Ticket prices are affordable. The biggest problem is hotels quadrupling their rates on the back of concerts and sporting events. The Government should step in and make this practice illegal”.
The Taylor Swift inflation effect
The most published and recent evidence of this is the upcoming Taylor Swift concert which is one of the largest music tours in history. Since the tour dates were announced last June ‘Swifites’ worldwide hurried to book accommodation for their stay in the city. The demand for occupancy increased, as did room rates. This temporary surge in demand seen some hoteliers in the industry increase their prices with one hotel increasing the price from €399 to €999 per night on the dates that coincides with Taylor Swift concert date. This is indeed an astronomical increase and the media; the public and politicians have vocalised their concerns around this exorbitant increase. Hoteliers in the city have been accused of engaging in price gouging and excessive pricing.
Debunking the price gouging myth
Elaina Fitzgerald Kane director of Fitzgerald House Hotel and Spa in Adare, County Limerick and chairperson of the Irish Tourism Industry Confederation expresses her concerns around accusations of ‘price scourging’ within the industry. When interviewed by RTE back in June of 2023, she spoke candidly about the references to price gouging in the media and claims she finds the term both ‘upsetting and hurtful’. Such headlines do not reflect the value for money pricing strategies of adopted by the small to medium size enterprises her organisation represents.
“Taylor swift pricing does not really reflect the reality out there. The hotel in question that had increased their price to 999 euro, in my understanding did not have any rates online, so a default rate was put up. There is a smaller selection, a limited availability and they grab all the headlines, they don’t reflect the reality around the country”.
She also points to an important statistic, from 2019 to 2023 there was a 18% increase in price of hotel rooms. This is a small percentage when other factors such as rising inflation costs and the return of the Vat to 13.5% rate are considered.
Fáilte Ireland report
In December 2023, Fáilte Ireland published a report entitled ‘Dublin Hotel Pricing – A Comparative Review. The findings were illuminating and provided context and a clearer understanding as to the source of this surging hotel prices when demand is significantly higher than the norm.
The report highlights how media headlines around excessive pricing do not reflect the reality of the situation and can undermine the industry’s ‘value for money’ reputation. Many tourists choose to visit budget friendly destinations and high accommodation costs negatively impact industry’s performance internationally.
“Fáilte Ireland advise that such spikes were not “necessarily representative” of the wider hotel sector in general. These spikes, or compression events that occur when demand is highest, have the potential to cause reputational damage for the sector”.
Supply & demand comparative analysis.
Major events such as the Taylor Swift concert, sporting events and national holidays such as St. Patrick’s Day, generate high demand and there simply is not enough supply to meet the demand. This results is increased prices as most of the average priced rooms are booked well in advance. There are very few alternatives to choose from and this is placing extreme pressure in this relatively small marketplace.
This is not an isolated scenario. The Taylor Swift concert tour is having the same impact on hospitality industry globally. Increased demand is having a knock-on effect on prices to varying degrees. According to research undertaken by The Travel and Leisure online magazine these price increases are more evident in the smaller markets, who have limited supply to meet this demand. For example, major cities such as Paris and London have lower price increases, 5% and 9% respectively. Cities such as Liverpool, Dublin and Stockholm have much higher price increases. Liverpool prices are increased by 116% and Stockholm by 119%. Liverpool and Dublin have chronic supply shortages and less inventory to meet demand. The larger markets are better equipped to meet demands and facilitate these major demands.
Fáilte Ireland concluded the following
Dublin is ‘not atypical’ from other major cities when available stock cannot facilitate the extra demand that comes with large events. High demand for hotel rooms during large events or concerts are a symptom of “supply struggling to meet demand and, in an era of dynamic pricing, high-demand nights putting strong upward pressure on room rates”.
Whilst the lack of supply and increased demand is concerning, there are some positive takeaways from this report. Tourism and the hospitality industry is experiencing ongoing recovery post covid, both domestically and in inbound tourism. These major events do boost localised economic revenue by €81,000. If the barriers to supply are addressed promptly and effectively, these events could positively impact the industry overall.
