Hotels and guesthouses - disappointing start to the summer season

Wednesday, 18th July 2012

Hotels and guesthouses in regional tourism areas are seeing a disappointing start to the summer season, according to the latest Irish Hotels Federation (IHF) Quarterly Barometer* with increased business in urban areas masking poorer performance across the rest of the country.

On a national basis, 55% of hoteliers are seeing some increase in business compared with this time last year, with Dublin, Cork and Galway witnessing increased activity concentrated around business and event tourism. However, outside the main urban areas, the anticipated upturn in tourism has failed to materialise with occupancy levels lagging in many seasonal hotels and resorts, particularly along the west coast.

When asked about the outlook for their business over the next twelve months, 50% of hoteliers indicate they are optimistic; this compares to 64% with an optimistic outlook this time last year.

Results of the survey show an overwhelmingly positive response to the Government's decision to retain the 9% tourism VAT rate which is providing a vital lifeline for many businesses in the sector. Nine out of ten (93%) hoteliers say the measure will continue to have a positive impact on business into 2013 while 50% say they are likely to take on additional staff over the next year as a direct result.

Bettie-Marie Burger Smit, Chairperson, South East Branch IHF states that, despite an actual decline in visitor numbers for the first five months of the year, hoteliers had been optimistic for an upturn in business this summer but this has not materialised outside the large cities. He says, "Performance has been patchy at best and we're now expecting business levels to be flat in many parts of the country which is severely disappointing given the very low visitor base we're working off at 30% less than the peak in 2007."

Highlighting the tremendous value to be had in hotels throughout the country, Ms Burger Smit says this is only half of the solution. He says "The other half is getting our marketing message right and giving holidaymakers new reasons to visit Ireland. The challenge for the rest of the country is to ensure we continue to invest in our regional tourism product, building on successes such as the Greenway cycleway in Mayo and accelerating the rollout of the Wild Atlantic Way touring route."

When questioned about issues impacting on their businesses, hotels and guesthouse owners identify local authority rates as the most pressing issue. This is followed by utility costs (electricity and gas), wage costs, excess capacity, weakened consumer confidence and limited availability of credit.