Irish Hotels' Business Sentiment Has Slipped, According To The IHF
The tourism industry's mixed performance last year looks set to continue, according to an industry survey undertaken by the Irish Hotels Federation (IHF).
While 40% of hotel and guesthouse owners across the country reported an increase in business levels compared to this time last year, 45% reported a drop.
Just one third of hoteliers that took part in the survey reported a positive outlook for 2020, compared to 40% this time last year.
Hoteliers that took part in the survey expressed concerns about the high costs of doing business. These concerns include what IHF president Michael Lennon described as "hidden" costs, which he said are not readily considered when discussing the challenges facing sector.
Lennon stated, "Local authority rates, for example, are the single biggest cost that tourism businesses have no control over. Hotels are making a disproportionate contribution to local authority funding, with many hoteliers levied rates of up to €3,000 per bedroom while the average local authority rates equate to €1,500 per room.
"A shake-up of local government funding is long overdue. We are calling on the incoming government to ensure a fairer distribution of the rates burden right across the country. Hotels are willing to pay fair and reasonable rates, but recent commercial revisions have led to excessive increases in many cases."
Higher water charges is another concern that was raised by those who took part in the survey. Lennon said that hoteliers have serious concerns about the approach taken by Irish Water in relation to harmonisation and increases in the overall cost burden on businesses.
He said, "These proposals will impact significantly on our sector given the relatively high usage of water by hotels, particularly by those premises with leisure facilities. The proposed increases, in many cases, amount to 30% over three years, which are completely unreasonable and a significant added pressure for a sector that is so price-sensitive."
The threat of a disruptive Brexit remains a significant concern for the vast majority of hoteliers. The survey found that both the British and Northern Irish markets continue to be challenging for the Republic of Ireland's hotel sector. 40% of those who took part in the survey reported a fall in business from Northern Ireland, and more than 60% have seen a drop from Great Britain. These reductions are being offset to some extent by the performances of the domestic and US markets, which remain buoyant. Home grown business is up year on year for 46% of the hoteliers who took part in the survey, while over a quarter are reported an increase in business levels from the US.
Just over 40% of hoteliers reported an increase in forward, or advance, bookings for the remainder of the year, while a similar number reported a fall.
While business sentiment is subdued, hoteliers are continuing to invest in their properties, with over three quarters of those that took part in the survey saying that they have plans for refurbishment or capital expenditure projects during 2020.
"Irish Tourism Cannot Afford To Stand Still"
Lennon said, "Irish tourism cannot afford to stand still. It supports approximately 260,000 jobs across every county, over 90,000 of which have been created since 2011. It generates over €9.2 billion in revenue, making it a major contributor to rural economies. It is also highly competitive and we compete internationally for business every day of the week. Irish hotels are renowned across the world for the quality of our properties and our high standards of service. Maintaining such a reputation requires continued investment to ensure our product remains fresh and relevant in the face of evolving consumer tastes."
The following is the breakdown of hotel and guesthouse business levels across key markets compared to this time last year, according to the IHF:
- Great Britain: 10% of hoteliers are reporting an increase, 62% are seeing a decrease and 28% see no change;
- Northern Ireland: 10% are reporting an increase, 43% are seeing a decrease and 47% see no change;
- United States: 27% are reporting an increase, 33% are seeing a decrease and 40% see no change;
- Irish domestic market: 46% are reporting an increase, 29% are seeing a decrease and 25% see no change;
- Germany: 13% are reporting an increase, 27% are seeing a decrease and 60% see no change;
- France: 7% are reporting an increase, 21% are seeing a decrease and 72% see no change.
© 2020 Hospitality Ireland – your source for the latest industry news. Article by Dave Simpson. Click subscribe to sign up for the Hospitality Ireland print edition.