The hotel sector is in a crisis situation, with overcapacity at 20%, or 12,000 rooms. According to the Irish Hotel Federation, 50% of hotels are in serious financial difficulty.
IHF chief executive John Power is looking for urgent Government assistance for the sector, and next Wednesday the federation holds an emergency meeting to discuss the crisis.
Mr Power says expansion in recent years was unsustainable - 61,000 beds are now available in hotels around the county, compared with 40,000 in 2002. The number of hotels in the country has doubled in the last 13 years, and about 100 of these were built on the back of tax breaks.
The IHF wants the state to intervene to restructure and rescue the sector. It says a substantial number of hotels will be transferred to NAMA, and it wants a say in how the National Asset Management Agency will deal with these businesses.
John Power said a mechanism is needed to control how overcapacity is taken out of the market. He said the rooms should be used for another purpose for a five year period.
He also called for an adjustment in the capital allowance scheme so investors would not have to pay back any tax breaks they have already received on their investment.
He said that that with Government intervention, there can be a sustainable future for the sector.
The federation notes that some hotels, already taken over by banks, are offering below cost deals to consumers and distorting the market for other operators.
The IHF is also calling for a substantial reduction in local authority rates charges.
