Galway's multi-million euro tourist tax plans could bring in quadruple more than originally forecast

University of Galway researchers have designed a visitor levy scheme - similar to what is charged by local councils in some EU countries and in the UK - which shows that millions could be generated for not only Galway but the rest of Ireland too.

One of the researchers of the report, Dr Gerard Turley, states how Dublin City Council could rake in as much as €46 million extra per year because of the tax.

The Lecturer in Economics at University of Galway, said: “Based on a fixed tax rate per person per night, we estimate that each €1 of a Visitor Accommodation Levy would generate €44 million per annum for the local authorities. A €5 tax rate per person per night would generate almost €220 million for the local government sector.”

Helen Kilroy, Head of Finance, at Galway City Council, previously said a “back-of-the-envelope” calculation estimated that a €1 charge per visitor per night could boost Council coffers by €2 million every year.

This was based on 2.4 million annual visitors to the city, and an accommodation occupancy rate of 77%.

Currently, there is no mechanism for local authorities to apply tourist taxes, but there have been calls from Galway City Councillors in recent years to introduce a levy.

Speaking earlier this year, the Council wants a three-year trial in Galway City to determine if a tourist bed tax is a viable initiative that can be rolled out across the state.

Officials in City Hall presented a comprehensive plan outlining the business case for the introduction of a tourist tax in Galway City to elected members at their meeting back in April.

The report noted that some cities that suffer from over-tourism have introduced tourist taxes to control the number of visitors.

This was not the reason for its planned introduction in in Galway, however, and Ms Kilroy said the revenue raised would be ring-fenced to enhance the tourism offering and underpin funding of local infrastructure.

Sally-Ann O’Brien, Galway City Council’s new tourism officer, told the meeting that Ireland was an outlier in terms of not having a tourist tax.

She said that 21 of the 27 EU states have some form of bed tax, as do the US and UK.

Ms O’Brien said international visitors to Galway are mostly coming from mainland Europe (47%), US (27%) and UK (18%) and expect to pay a bed tax.

Chief Executive of Galway City Council Leonard Cleary said he was seeking a mandate from councillors to negotiate for Galway to become a pilot for a tourist tax.

The business case for the tourist tax argued that “tourists as well as local communities should be contributing to the socioeconomic development of” the city.

Councillor Shane Forde (FG) suggested that a city tourism tax could make overnight stays in hotels in places like Clifden or Loughrea more attractive.

Councillor Níall McNelis (Lab) said it was essential that visitors staying on short-term lets such as Airbnbs were subject to the tax, and that it was not confined to hotels.

Councillor Mike Crowe (FF) said he welcomed the idea but he said ”ultimately it is an additional tax and a new tax”.

He urged caution and warned that the “perception” of the tourist tax could do more damage than the financial gain.

Councillor Eddie Hoare (FG) said they should not call it a tourist tax and instead should use the term “bed levy” or “visitor levy” because “it is important how we frame it”.