Government ministers are to meet hotel representatives next week to discuss accusations of price-gouging within the industry.
The Public Accounts Committee also heard accusations that the industry is "price-gouging".
The Department of Tourism said it is important for Ireland to maintain a reputation for value for money in the accommodation sector but that there seems to be an increase in the scale and frequency of price spikes, often coinciding with concerts and sporting events.
"I think this needs regulation," Labour TD Alan Kelly told the Public Accounts Committee.
"I think what's going on in Dublin is a national disgrace. It's embarassing our country."
Katherine Licken, Secretary General at the Department of Tourism, insisted that the Government is "acutely aware of this issue".
"The ministers are meeting the industry next week," she said.
"There is a reputational issue for Ireland," she accepted, particularly "as a value for money destination".
Mr Kelly noted that the sector had received "so much support during Covid-19", and claimed that they are now "disrespecting" the country.
"Dublin, in particular, is letting down the rest of the country," he said, adding that talking to the industry is "a waste of time".
'An acute' shortage of hotel rooms - industry
The Chief Executive of the Irish Tourism Industry Confederation said there is very good value within Irish tourism while acknowledging that there is "an acute" shortage of hotel rooms.
Eoghan O'Mara Walsh told RTÉ's News at One that this is impacting on prices and when the reduced supply is added to the increased cost of business "it's going to push prices up".
He said value for money is very important for Irish tourism and mistakes were made in the past, especially before the financial crash, that caused reputational damage and affected business performance in the following years.
While costs are rising, Mr O'Mara Walsh said, it is vital the sector maintains "value for money".
"There is a minority of tourism and hospitality operators who charge excessive prices at key times of the year. They are the minority, and I don't think they are reflective of the broader industry."
He said they do not put the industry in a good light and should "rein back their pricing".
"There are 20,000 tourism hospitality businesses in the sector. I think the vast majority are very responsible ... the vast majority are based in regional Ireland, are SMEs, are family run, labour intensive. That is true Irish tourism."
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Mr O'Mara Walsh also addressed the issue with supply in some areas because the Government has contracted thousands of rooms to house Ukrainian refugees, as well as asylum seekers.
He said that while the hotel sector receives remuneration from the State, tourism businesses downstream are feeling the impact.
"We have called for some time that the Government has to have a much more comprehensive response as to how they are going to house refugees and asylum seekers on an ongoing basis.
"They can't be overly reliant on hotels and guesthouses. Tourism and accommodation suppliers will obviously play their part, but we can't be the primary accommodation provider because it has too big an economic impact on our sector."
Mr O'Mara Walsh also said there is a need for more hotel stock.
Allegations of concert price hikes
The comments come amid fresh allegations of price hikes in the hotel sector, centred on the just-announced Taylor Swift concert at the Aviva Stadium on 28 and 29 June next year.
Anecdotal evidence points to some hotels significantly hiking prices to coincide with those concerts, with one Waterford woman telling RTÉ News that she and her friends were hoping to attend.
"The hotels we were looking at were usually €250, €290, €310 per night, but they've gone to €999 per night, which is out of my reach," Jo Cregan said.
However, the Irish Hotels Federation (IHF) said in a statement to RTÉ News that the "vast majority" of hotels in Ireland don't release rooms for online booking more than a year out, meaning that there is "almost no availability" of hotel rooms at the moment for the Taylor Swift concerts through online booking engines, as they are still more than a year away.
"For many hotels, even shorter lead-in times apply for listing rooms through online booking engines," the IHF said.
"This means that people looking to book at this stage should consider contacting hotels directly, either through their own websites or by phone to enquire about rates and get the best value."
The Department of Tourism spokesperson said in a statement that there seems to be "an increasing spike in the frequency and scale of price spikes in the accommodation sector, often coinciding with concerts and sporting events."
"These price spikes lead to both reputation damage of the sector within Ireland and damage to Ireland's reputation globally for offering value for money."
The spokesperson added that it's important that Ireland maintains its reputation as a value for money destination.
In Waterford, Granville Hotel general manager Michael Skehan said value is always available for customers.
"This [price hike controversy] happens every now and then, especially when large events are announced, be it in the cities or around the country. I think in general hotels are very responsible when it comes to pricing," Mr Skehan said.
"Yes, there are pinch points and days when it's incredibly busy and rates do go up but I think in general a hotelier, as I am, we don't want empty rooms, we want to fill the rooms and generally it's important that we fill the rooms."
Mr Skehan said that "90-plus percent of people will get good rates when they book in advance or book directly with the property and things like that."
