The Government should act to ease a crisis in the hotel industry that has already pushed many businesses into receivership and liquidation, the Irish Hotels Federation (IHF) said today.
The group said high levels of debt among hoteliers, falling tourist numbers, lower expenditure, a considerable over capacity of beds and close ties to the property sector have caused serious problems in the industry.
IHF chief executive John Power said about 50 per cent of hotels are currently experiencing serious financial difficulties and that most hotels are operating at a loss this year.
Mr Power said the federation’s 1,000 members, which employ some 60,000 people, require urgent Government assistance to help stabilise their businesses which have been “decimated in recent months as people pull back on holiday expenditure”.
“Handling this crisis needs Government intervention and we believe that with proper intervention that we can have a sustainable industry longterm,” he told RTÉ radio.
Mr Power said additional capital was needed from banks to help hotels stay afloat over the winter months and this should be guaranteed by the Government.
He said expansion in the industry in recent years, which was encouraged by tax breaks, was unsustainable and that 61,000 beds are now available in hotels around the county, compared to 30,000 in 1996. This represents an over-capacity of some 12,000 beds or 20 per cent, which Mr Power said should be taken out of the market.
The problems facing hotels have increased over the last 18 months with the contraction of domestic and international tourism markets, which are expected to continue to perform poorly well into next year.
In June of this year the number of overseas visitors arriving in Ireland was 15 per cent less than in same month last year, with visitors from Britain, the State’s largest tourist market, down some 20 per cent in the same period.
The IHF has scheduled a crisis meeting for members to discuss their difficulties next week.
