The Hotels That Participated In The Latest IHF Survey Reported That Their Revenues Declined By A Combined Total Of €2.6bn Year-On-Year In 2020
According to the Irish Hotels Federation (IHF), Irish hotels and guesthouses that participated in its latest hotel industry survey reported that their revenues declined by a combined total of €2.6 bil...
According to the Irish Hotels Federation (IHF), Irish hotels and guesthouses that participated in its latest hotel industry survey reported that their revenues declined by a combined total of €2.6 billion year-on-year in 2020 due to the impact that the COVID-19 pandemic had on their businesses.
165 properties across Ireland with a combined 16,950 guest rooms took part in the survey, which was conducted between December 23 and December 30 of 2020.
All Areas Of Hotel Operations Affected
The IHF stated that the €2.6 billion revenues drop figure is a 60% year-on-year decrease and that the decline in revenues affected all areas of hotel operations, from accommodation to food and beverage to corporate events and social gatherings.
The IHF added that room occupancy declined to 30% last year from 73% in 2019.
"A Catastrophic Financial Shock"
IHF chief executive Tim Fenn stated, "We have experienced nothing short of a catastrophic financial shock, with risks of a prolonged and devastating impact on our industry and the ability of tourism businesses to survive and recover. Government supports so far have been piecemeal and fallen far short of what is required given the extended restrictions and economic damage facing our sector."
"Calling For Decisive Government Action"
Fenn continued, "The government must come forward with a more coherent, sector-specific programme of supports and measures to secure the long-term financial sustainability of hotels and guesthouses. We are calling for decisive government action in the form of an Emergency Tourism Budget to include substantial increases in payments to tourism businesses under the Covid Restrictions Supports Scheme (CRSS), enhanced employment subsidies, extension of the local authority rates waiver until the end of this year and a further six month moratorium on bank term loans to support cashflow.
“We also calling for a clear commitment from the government to retain the 9% tourism VAT rate to assist recovery and secure a viable and sustainable future for our industry. Tourism businesses such as hotels are now contracting for international business up to two years out in an exceptionally competitive market with one hand tied behind their back. As yet, they have no pricing certainty in relation to the retention of this critically important VAT measure, and this must urgently be addressed.
"It is critical that we get certainty around supports for business recovery. We cannot afford any delay if businesses are to have a fighting chance of getting back on their feet this year. A severely devastated hotels sector would be a major loss to Ireland's economy and society for many years to come. This can and must be avoided."
According to the IHF, an estimated 160,000 tourism jobs have been lost in Ireland since March of last year, and it said that the government's priority must be to ensure that everything possible is done to recover these jobs.
Fenn addeed, "These jobs matter - not only to the people working within the industry but also to the wider economy, especially the many parts of regional Ireland where tourism is the only show in town. A failure to support the industry now will have ramifications for the future of Ireland's tourism offering and for the economy that could take decades to recover fully."
Five Urgent Measures
The IHF has highlighted what it says are five urgent measures that are required from the government. The five measures are as follows:
- The COVID Restrictions Supports Scheme (CRSS) should target businesses with a 75% drop in revenue, with the doubling of payment amounts irrespective of the level of COVID-19-related restrictions as well as the removal of the current €5,000 weekly cap;
- The Employment Wage Subsidy Scheme (EWSS) should be extended until the end of 2021 to enable tourism businesses retain staff;
- The local authority rates waiver for tourism businesses should be extended until the end of 2021, after which the payment of local authority rates should be based on reduced levels of activity due to the COVID-19 crisis and until the industry has recovered;
- There should be a further six month moratorium on bank term loans to support cash flow, and additional mortgage deferment for employees impacted by the crisis;
- There should be a clear commitment to retain the 9% tourism VAT at least up until 2025 to assist recovery and provide certainty for tourism businesses.
© 2021 Hospitality Ireland – your source for the latest industry news. Article by Dave Simpson. Click subscribe to sign up for the Hospitality Ireland print edition.