Plans to rent out half of a 900-bed student block as AirBnB-style rooms during July and August will “undermine the tourist economy”, a provincewide body has said – but the scheme has been given a green light anyway.

The £65m student housing project will see a disused office block on the capital city’s Corporation Street, close to landmarks Albert Clock and Custom House Square, demolished to make way for a huge new building stretching 20 storeys into the sky.

Developers Elkstone Partners plan to rent up to half of its 895 rooms out as short-term lets when students aren’t there, which has the chief executive of the Northern Ireland Hotels Federation, Janice Gault, predicting the scheme will damage Belfast’s hotels.

When the housing block came up for debate at Belfast Council’s planning committee on Tuesday night (17th), she argued the short-term lets move would be unfair competition with the more tightly regulated hotel sector during prime summer months.

placeholder image — The existing 39 Corporation Street, a disused office building.

Representatives for the developers claimed the scheme won’t go head to head with hotels as the rooms will be much cheaper, however, offering prices broadly similar to those seen in hostels – and added the overall project would be “a beacon for the regeneration of Corporation Street”.

But Ms Gault was adamant that 450-odd short-term let rooms constitutes “a considerable amount of product, and would increase the amount of student accommodation on the market by 27%”.

“We also feel that it doesn’t compete in a fair way with the general tourism industry,” she said. “Hotels in particular, but all aspects of it. It’s a very large product to bring into the marketplace.

“We feel that this project, the scale and the size of it, does present considerable issues for the tourism economy within the city. For that reason we would urge [the council] not to approve it.”

The project will see 39 Corporation Street, a disused 42,000 square foot office building that opened in 1991, replaced with the massive student block.

Arguing in favour of the project, the managing director of property services firm CBRE NI, Brian Lavery, said: “We do not see this as competition to the established hotel market in Belfast; we see it as a separate market, and a satisfaction of that market.

“We see it as competition, potentially, with the current AirBnB accommodation available in Belfast; we see it as basically summer visits for backpackers and students, who do not have that facility currently in Belfast.”

He added that Northern Ireland’s capital city is lacking in hostel beds compared to Dublin, failing to offer much in the way of low-cost rooms for younger tourists.

Belfast has seen a boom in constructing housing blocks for students over the past few years, driven by the Ulster University’s massive expansion of its campus there.

Ms Gault questioned whether it needs such a huge amount of student accommodation at all, stating before 2016 Belfast had less than 2,000 student beds; now, she said, the city has almost 9,000 with a further 5,000 to 6,000 under construction or seeking planning approval.

However council planners said data on demand for student accommodation obtained from city universities showed the Corporation Street project’s additional 895 beds would still be “within the threshold of unmet need”.

The housing block was unanimously rubber-stamped by Tuesday night’s committee.