Vision for Short-Term Rental Sector 2024-29

Self-catering Ireland

The Industry at Present

Current Rent Pressure Zone Legislation – The RPZ regulations were set up in 2018 with the legitimate aim to manage accommodation in the greater Dublin area. However, they have quickly crept across the country to cover a lot of the island of Ireland with over 80% of houses and accommodation with Short Term Rental (STR) restrictions. The maps below demonstrate the effect of this RPZ legislation which has resulted in existing STR businesses not having a right to continue in business.

 

Where ISCF Sits in Irish and EU Tourism Infrastructure.

The ISCF has a clear and important position within the tourism infrastructure in Ireland and at EU level. This sector should be funded as a national tourism development group, in a manner similar to the Western Development Commission or other development organisations.  It should have its own direct links with LEO and Leader Development funding at regional level.

UN Sustainable Goals

The UN Sustainable Goals will be central to all tourism development in the next decade.  We promote the UN Sustainable goals to all members and advise on the Glasgow Agreement

 

Self-Catering Eco System

According to CSO data foreign residents spend 12 nights in STR accommodation as compared to 5 nights in hotels or conference centers (CSO Data July 2023).  As a result, they are spending more money in the rural economies.  Self-Catering owners are often female, over 45 and this is her sole income or pension. She may work directly with customers via local marketing companies or via an online travel agent (OTA). The benefits to the local economy are many from shops, pubs, cafes, restaurants, transport companies, visitor attractions, to service providers such as laundries, local catering companies, web developers, tradespeople, IT specialists and accountants.

Self-Catering in Ireland – at the centre of the Community

This distinct group are individual owners who make up the majority of the ISCF membership, owners of a few or group of properties or marketing companies in a region or nationally. To date there are a limited number of branded home management or apartment companies in Ireland due to the RPZ legislation.

 

Data on Self-Catering an Essential Part of Growth.

To date there has been no clear data collection on the STR sector. The CSO provided no tourism data during Covid, and the presentation of data now does not clearly differentiate between self-catering, hotels, caravan and camping, boat hire and the BnB sector. At EU level the data is clear that there has been a very uneven recovery in tourism across the EU, with city destinations below 2019 values. The increased domestic marketing in 2020 to 2022 was not repeated in 2023 and there is little recovery to date in the EU markets coming to Ireland.  In the EU over 1.5 million tourists per night slept in a bed booked via the platforms.

 

The Online Travel Agents in the Irish Market

There are many international online travel agents (OTAs) but the 3 most successful in the Irish market are Booking.com, Airbnb and Expedia who own VRBO. TripAdvisor does not sell directly to customers much in the Irish Market and most other international companies do not have a presence here. The OTAs were welcomed into Ireland since 2011 by Failte Ireland and other Government agencies who invited them to have international headquarters in Ireland. This has led to an unregulated sector, due to the action of Failte Ireland in 2008, and it is impossible to put the sector back to the same position as it was in 2008. Clearly this is the fault of many actions of Government, but the industry is now under threat and held to blame for any success.

Employemnt in Tourism in Ireland – ITIC

 

In an article in the Journal.ie the Minister for Housing Stated he was going to close down Airbnb, and go talk to Brussels. Such hyperbole is not helpful and using the present lack of clarity of regulation, caused by his department is unacceptable. It is essential that legislation introduced regarding short-term rental is balanced, proportionate, fair and can accommodate certain situations. The European Commission intervened after many Irish families and small businesses contacted them due to a mechanism available to all EU citizens who feel that legislation being introduced by their government fails to reflect these outcomes. There is a reason why the European Commission paused the previous legislation. They could see the flawed assumption being made by introducing the proposed legislation.

 

Pressures on Industry and Constraints

1. Lack of Clarity on Sector has Hampered Development

The Irish landscape and topography are ideally suited to self-catering which can blend in with the rural landscape, unlike large scale hotel developments. There has been a lack of growth in this sector in Ireland, unlike Northern Ireland and many EU countries due to a lack of clarity on planning and development requirements. While hotels were allowed to develop self-catering accommodation on their grounds little STR Development by SME has taken place since 2016. The planning permission has not been given or is restrictive or too onerous for SMEs to comply with. This has also led to the lack of salability of SME Self-catering businesses or marketing companies.

The ISCF has engaged with and participated in roundtable talks with Government agencies in a positive manner, but progress has been very slow. At a recent meeting (1/11/2023) with the Dept of Housing and Dept of Tourism, a draft document was proposed to deal with the emphasis. As the 2019 Rent Pressure Zones have had a decremental effect on legitimate urban accommodation, the cost of hotels has risen to one of the highest in the EU. Rural areas have also been severely hampered in the development of the sector.

The proposals from the Dept of Housing are for details on existing and development of STR as follows: –

– Properties in Urban RPZ areas

– Properties in Rural RPZ areas – farm diversification etc.

– Properties outside RPZ areas – friendlier regime in rural areas

We need clarity on what the Department of Housing is proposing, as each county council manages their planning in an autonomous manner with reference to their development plan. This could prove uncompetitive and unfair when deciding on which Irish families and SMEs can continue in business and who cannot.  There needs to be clear guidelines given and written down in a concise document with timelines for all proposed developments.

Details of grants and support from Government agencies provided to the sector needs to be clearly stated as well as any constraints on sale of the businesses at a future date. A clear willingness to take part in a Digital development strategy at local and national level needs to be agreed.

 

2. Lack of Economy Beds due to Government Contracts.

According to CSO data much of this accommodation is in hotels, though approx. 15% is on self-catering group

Governemtn Contracted Beds 2023

units. These are mostly on hotel grounds, golf courses or multi-unit apartments. It has to be said that some owners of STR have moved to house refugees, as they are not allowed to continue in business due to the arbitrary nature of RPZ regulations (e.g. Kilkenny, Killarney). In South Kerry a member of ISCF identified the loss of 105 houses to the STR market in 2022. Apart from the economic value of the houses we calculate the economic value to the area of each house with €250 per person spent in the area to be a loss of €2.97 mil to that area alone

 

3. The Lack of Group and Coastal Schemes-

Self-Catering Ireland

Group Schemes of properties.

these groups and coastal schemes were developed in rural areas in the 1980s and 1990s and reached tax

areas in the 1980s and 1990s and reached tax maturity 15 or 20 years later. They were very successful as overseas travel agents could book properties with the owner or local agents. When these properties were sold off as individual housing units, they were lost to the tourism market. More schemes would be built in coastal and rural areas. Self-catering as part of farm diversification or glamping clusters of SME businesses working together will bring more people to various areas across the country.

This is particularly important as it spreads the tourist footprint across the county and thus makes self-catering a sustainable form of accommodation. It is worth noting that a significant amount of existing stock of properties with STR planning permission are rented long-term to individuals or to county councils in the form of HAP schemes.  This should be regularised accordingly and join the formal long-term planning sector. At present properties with STR designations are often turned down for change of use planning to long term occupancy.

4.  Equal Tax Treatment of STR Businesses – at present there is a max allowance of €10,000 to upgrade an STR business to include more sustainable electrical and other equipment. Bed and Breakfast owners can have all of costs in refurbishment written off against tax, as well as transport for the business.

 

Possible Development of Self-Catering in Ireland 

The Self-Catering option should be available to all who holiday and work in Ireland.  There is a need for accommodation all year around for many groups including those receiving medical treatment, on work contract in an area nurses/doctors/film/ contract workers, people whose houses are being renovated due to flood, fire or storm damage, digital nomads who stay in an area for 1-3 months.

Growth Trajectory for Tourism in Ireland

An ITIC Report states that 14000 new beds are needed in the next 5 years to meet tourism targets and we recommend that 50% of these beds be self-catering in one type or another. This is due to the change of consumer needs due to Covid, re-use of old buildings being more environmentally sustainable and self-catering blending in with the rural landscape.

The report commissioned by ITIC on Irish Tourism growth and revenue is ambitious with 14,000 additional beds needed, providing €330- €350,000 in extra jobs and an income increase to €3.5 billion by 2030.

Of these beds some need to be hotels in urban areas, but as these meet few of the UN Climate goals it is better to focus on the economy and alternative markets for accommodation. Increased campervan parking sites, with regulation on where they can stop overnight is needed. For Self-Catering the development of SME Family run businesses all over rural Ireland is needed.

 

 

Vision for Development of the STR Sector 2024-29

  1. Regenerative Accommodation Development
    Best in Donegal

    Fanad Lighthouse is one of many with Self-Catering rentals

At a recent IAAT (Irish Activity + Adventure Tourism) Conference the lack of accommodation in self-catering,hotels beds, guesthouses or BnB was referenced as a cause for lack of growth in this €1.5bn activity industry, with a complete lack of regeneration of accommodation lost in the past 5 years. This may be due to hotels, hostels, guesthouses closing down or to Government contracts, BnB particularly in rural areas not-opening after covid or closing down due to the age profile of the owners. Replacement stock of STR accommodation of all types is needed to allow the tourism sector to grow.  The ancillary services such as accommodation types, restaurants, cafes, and other SME businesses should follow the development of such facilities, but in the experience of some participants the Planning and lack of support for accommodation development is a serious issue limiting the growth and economic potential of any developments.

 

2. Farm Diversification

Self-Catering Ireland

Stay on a in a Farmhouse cottage in Co Tipperary

Agritourism was relaunched by Teagasc and the ISCF at a well-attended event in May 2023, and opened by Minister Pippa Hackett. The importance of development of this sector was identified by the Oireachtas Tourism report. 

The UNWTO also stated that sustainable rural tourism was a enabler of people to continue to live in rural areas.Increased SME participation in STR in Rural areas due to Farm Diversification. This could be supported by EU Green Transition funding. The ISCF could work with these owners to develop & provide a warm, welcoming, and professional offering in rural Ireland.  Links with Teagasc on Rural Development in place, and they are adding an advisor to their development teams. The ISCF needs to be able to provide support for these Teagasc advisers (who are non-specific in skills).

 

3. Develop STR in Rural/ Coastal Areas and Urban Areas

Best in EU

Winner EU Family-Friendly holiday home of the year 2021

The EU has a clear vision for the longterm sustainable development of rural areas  and thus was alos cleary stated in the Tourism Action plan in 2016, to be updated in early 2014.  Development of rural and coastal Schemes throughout Ireland in the next 5 years, replacing the lost stock.   These should be retained as full individual or corporate ownership, to preserve the economic value of them to future generations in rural Ireland.

In Urban areas a simple change of use planning for existing STR still in business. This would allow all those outside the planning system at present to get planning and continue in business. For all future STR businesses the planning designation of STR rental be allowed before registration.

Noise control, use within multi-occupancy buildings and in social housing estates be controlled.

Clarity on all housing stock – many houses were built as part of Castle Schemes or with a certain % as STR houses. But in many Planning offices there was no clarity on the number of each house with the STR designation. Clean up this lack of planning clarity and if properties are now lived in long-term, or on long-term government contracts (6mths +) then these houses get a designation as a permanent residence. At a meeting in Killarney in 03/23 a person who owns a group of STR cottages was advised she could not get long-term planning on those houses and would have to continue in short-term rental market.

4. Targeted Development of STR Product

A clear  targeted development  for economy STR Accommodation along Greenways and the EuroVelo Route. At present the

Self-Catering Cottages

Euro-Veolo Route along the Wild Atlantic Way is planned

Atlantic Coastal Route connects 6 countries and is the longest EuroVelo Route network.The EU has set target for the development of this route and Ireland has 2,350km (22% of total Route) through 11 counties – Donegal, Leitrim, Sligo, Mayo, Galway, Clare, Limerick, Kerry, Cork, Waterford, and Wexford.

  • A report in September 2023 stated that most of Ireland’s routes were at “At the planning stage: undeveloped route with no detailed information publicly available on the Internet. The itinerary communicated is a proposal for the best possible option currently available. It may also contain dangerous sections. Cyclists are advised to use public transportation to skip these non-developed stretches”.  Only 7% of the Euro Velo route.  meets the criteria – along the Limerick and Waterford Greenways. Both these regions are now in ROZ areas with complete restriction on the development of Self-Catering accommodation.

5. Inclusive Development

Universal Design – All Tourism business development above a certain number of units must include universal design to accommodate the elderly, those who are visually impaired, in wheelchairs or other diverse needs included in the option of self-catering accommodation.  Grant funding should be linked to the Principles of Universal Design and certified by OT professionals.

 

6. Sustainability

Sustainable practices for Self-catering, with buildings already providing the serve as the most sustainable of all. Retrofitting of existing approved and Registered STR properties should be certified particularly in Gaeltacht areas and data gathered.  At present the SEAI looks at large tourism businesses such as Hotels, visitor attractions and restaurants as providers of energy efficient. The same facility, grant aiding for SME businesses with an income under €50,000 will see many small energy saving, and this sector is easier to retrofit.

Self-catering Ireland

Regenerative Tourism in Action at Wicklow Lighthouse

Incentives for farm buildings to be converted to Self-catering, allowing for growth and farm diversification. Promotion of a Sustainable strategy within the Tourism Action Plan 2019-2021 with link to UN Sustainable Goals and the Glasgow Declaration and including measurable sustainable criteria in offering Owners make sustainability a core part of the self-catering offering, including the local transport links, a sustainable policy on their website and details of how the holiday can be made more sustainable. The Irish Landmark Trust has a focus on regenerativer tourism with bringing heritage buildings  back into use, using traditional skills and earning income as Self-Cateirng properties all over Ireland, with support from Hertiage and Governemnt agencies.

There needs to be a balance in the marketing with distance travelled by guests, particularly the Asian market who focus on golf and need to stay for over a week to offset carbon footprint.   Sustainable tourism means allowing those who live in rural areas to earn a viable income with Udaras na Gaeltachta developing a collaborative approach to tourism. Development is based on partnerships between various organisations, and on the maximisation of the potential of resources.  The 2021-25 Strategic Plan for Udaras  need to identify STR properties in the Gaeltacht areas and identify where STR can be developed while allowing for priority for the indigenous gaelgeoirí. We do not want to reach a point where unregulated Airbnb development means there are less homes for the local population.

 

7. Other Accommodation Offerings

Glamping in Ireland

Killarney Glamping, Co Kerry

There needs to be increased planning permission for Campsites, camper van sites for seasonal stay from April to October.   These facilities can be added to Self-catering businesses, to increase family income in self-catering units. Multiple units on one site or multiple business in clusters in an area or village will encourage guests to stay in an area. Glamping has become very popular with the younger demographic, and can be an all year round business, as shown by KIllanrey Glamping.

 

Conclusion

At a recent World Tourism Organisation (UNWTO) Global INSTO meeting (21/22 Nov 23) one of the key takeaways from the conference on its quest for tourism sustainability was the value of timely evidence for informed decisions. This demonstrates the need for the government to take on board the evidence highlighted by the Irish Self-Catering Federation when implementing legislation on the regularisation of STR. This document provides all the relevant data and evidence needed to carry out this function.

 

A second key takeaway from the conference was the importance of strong participation from stakeholders to local communities.  A sustainable successful self-catering eco system would support ancillary services such as activity providers, tourist attractions, restaurants, local shops etc.  These services would provide employment in rural and local economies across Ireland.  An example of strong participation by local communities would be self-catering as a form of farm diversification.  This is essential when looking at potential income streams for Irish farming families especially when farmers are forced to reduce their herd numbers in the fight against climate change.  Old farm buildings can be regenerated to provide holiday accommodation or glamping pods can be developed to offer an eco-experience to families who may holiday across the island of Ireland.  The possibilities are endless.

The final key takeaway from the ISCF conference was governance as a sustainability enabler.  The ISCF has always supported the need for a register for the self-catering sector.  This is needed for the sector to grow and develop.  That is why it is essential that legislation is not draconian otherwise the industry will be driven underground and that is of no benefit to the tourism industry as a whole, the Irish economy or the taxable income which may go overseas. The issue of specific planning permission in order to continue in business should be solely aimed at urban high-density areas.

The ISCF is here to support this government to implement the necessary legislation, but this process needs to be balanced, proportionate and fair to those who are presently working in this sector of the tourism industry. Higher value tourists stay longer in an area, spend more and in return support rural economies. This is paramount that this is encouraged to allow recalibration of the Irish tourism offering as a whole.

 

Board of the ISCF December 2023

Holiday Cottages Cork

Self-Catering Cottages in Roscarberry, West Cork