Hotel

IHF Appears Before Joint Oireachtas Committee

By Dave Simpson
IHF Appears Before Joint Oireachtas Committee

Following yesterday’s news (Wednesday 15 June) that hotels across Dublin are experiencing exceptional levels of advance bookings this summer, relative to capacity, as a result of a much faster rebound in tourism than previously anticipated, the IHF has issued a statement made by its chief executive, Tim Fenn, for an appearance before the Joint Oireachtas Committee.

“Coming Out Of An Exceptionally Challenging Two Years”

Fenn said, via the statement, “Our sector is coming out of an exceptionally challenging two years, during which hotels lost over €5 billion in revenue. Government supports, which are very much appreciated, were vital to the survival of many businesses, and we now look forward to recovery and sustainable long-term growth in the supply of important infrastructure within the Irish economy.

“As outlined in our submission, we have seen a much faster rebound in tourism than anyone previously anticipated. However, due to a combination of factors, there is a significant imbalance at present in supply and demand for hotel rooms in Dublin.

“On the demand side, in April 2022, Dublin had the highest occupancy rate of any city in Europe, at 83.6% – up from 18.3% in 2021. The average daily rate – ADR – for a hotel room was €154.31 – behind Amsterdam, Rome and London.

“This average rate was up 16.5% on April 2019, but comes at a time when hotels are reporting spiralling operational costs, with year-on-year increases of 88% in energy, 18% in food and beverage supplies, over 30% in linen services, and 20% in insurance costs.

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“On the supply side, Dublin has 22,492 hotel and guesthouse rooms registered with Fáilte Ireland. We estimate that 18,533 – 82.4% – of these are operating as hotel accommodation at present. The remaining 17.6% of rooms relate to government-contracted business and rooms out of service due to reduced staffing levels, staff accommodation allocations, supplier issues, and refurbishment projects. These supply issues are further compounded by delays in the construction of new capacity, due to the pandemic.

“The combined effect of these exceptional factors is that there are now more nights where occupancy in Dublin exceeds 90%, and the last-available rooms are quoted at rates in excess of the average.

“This has given rise to significant levels of media and political commentary and misperceptions around the overall value for money in the market in Dublin, which remains competitive with our European peers. What is often lost in this commentary is that the vast majority of rooms currently sold have been contracted and previously booked well in advance, at rates significantly below the last-available rates.

“For the current month, approximately 80% of the available rooms were sold in advance of the first of June – up from an equivalent 65% in 2019. This dynamic illustrates what we expect to be a short-term disruption to the market, which is likely to resolve itself as pent-up demand eases and additional hotel room stock comes on stream.”

“Clear That Enormous Challenges Remain”

Fenn concluded by saying, “However, it is clear that enormous challenges remain, as we seek to recover from the worst economic shock in living memory and focus on the long-term sustainable growth of our industry, including the restoration of over 270,000 tourism livelihoods throughout the country.

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“In conclusion, we look forward to discussing these issues with you in further detail and addressing any questions that individual members of the committee may have.”

© 2022 Hospitality Ireland – your source for the latest industry news. Article by Dave Simpson. Click subscribe to sign up for the Hospitality Ireland print edition.