Hoteliers say advance bookings are down on last year and fewer than half of them are optimistic about the business outlook for the year ahead, the Irish Hotels Federation (IHF) says.
Stubbornly high operating costs and concerns about the economic outlook are weighing on hoteliers’ minds as they gather for the IHF’s annual conference today in the Slieve Russell Hotel in Co Cavan, with more than half of hotels reporting a net decrease in bookings this year.
The group says the Government “must do more” to tackle the “very high” business costs.
IHF president Denyse Campbell pointed to a challenging outlook in which advance bookings are “underperforming” – down 4.5 per cent on last year – and business sentiment among hoteliers has taken a hit. IHF-commissioned research suggests that only 47 per cent of hoteliers are positive about trading conditions over the next 12 months, down from 74 per cent a year ago.
“While it is too early to predict the overall performance for the year, initial indications are concerning and highlight the challenges our industry faces across key markets,” Ms Campbell said.
“This is at a time when consumer finances are under ongoing pressure and businesses are dealing with additional costs and a sharp rise in interest rates. We are also seeing the impact of the Government’s decision to increase tourism VAT, making us an outlier with the third-highest rate of VAT in Europe.”
Hoteliers ranked rising business costs as the most serious challenge facing their business, with early forecasts indicating increases of in excess of 8 per cent in operating costs over the year ahead. This follows a period of already sharp cost increases over the last two years.
Some 79 per cent of hotels indicated they were concerned about the outlook for the global economy and the potential impact on their business. The domestic market is of particular concern, along with the UK and rest of Europe. Bookings for North America are holding up, however.
“It is incumbent on the Government to do more to tackle the very high cost of doing business within the Irish economy. This is a major challenge for tourism and hospitality, our largest indigenous employer. Increasing costs are continuing to erode our competitiveness as a destination and jeopardise the sustainability of our wider industry,” Ms Campbell said.
Some 78 per cent of hoteliers indicate they are planning refurbishment projects and increased capital investment over the next 12 months, including the refurbishment of guest bedrooms, common areas and technology.
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