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22.12.2015

92% OF IRISH HOTELS UPBEAT FOR 2016 - IHF INDUSTRY BAROMETER

Increase in Christmas Parties and Events, with Bookings up significantly on last December

 

  • 90% of hotels and guesthouses report increased business levels in 2015
  • 64% of hoteliers have taken on additional new staff this year
  • 92% of premises plan to invest in refurbishment and capital expenditure in 2016

 

Tuesday 22nd December 2015: Following a year of strong tourism growth, the vast majority of Irish hotels and guesthouses are upbeat going into 2016 with 92% saying they have a positive outlook for the next twelve months, according to the latest Hotel Barometer from the Irish Hotels Federation (IHF). A similar number (90%) report an upturn in business levels this year following a 13% increase in overseas visitors.

 

The hotels sector is benefiting from increased tourism from all key markets including North America (visitors up 13%), Britain (up 11%) and the rest of Europe (up 14%). Domestic tourism and hospitality business is also performing well following years of subdued consumer confidence. Some 85% of hoteliers report increased levels of business this year from the home market, with people taking more trips at home and spending more money in the local economy. This is important for the sector given demand from the island of Ireland accounts for the majority of all hotel bednights (69%).

 

In the run up to Christmas, growing consumer confidence and recovery in the domestic economy has been clearly evident on the ground. Of those hotels targeting Christmas functions, some 70% report that bookings for parties and events are up on last year. The increase is being seen right across the board, reflecting the widespread optimism among businesses nationally as they seek to recognise the contribution made by their staff during the year.

 

Stephen McNally, President of the IHF states that confidence among hoteliers continues to improve as the recovery in tourism strengthens. This has been supported by highly effective marketing campaigns targeting key overseas markets and a number of pro-tourism initiatives such as the 9% VAT rate. He cautions however, that issues around cost competitiveness need to be addressed and that the increasing cost of doing business in Ireland poses a serious challenge to tourism as the recovery in the economy takes hold.

 

The upturn is contributing to significant jobs growth with 64% of hotels and guesthouses having increased staffing levels this year and 57% planning to take on further staff over the next 12 months. This builds on the 33,000 new jobs created by tourism and hospitality businesses since 2011 – accounting for more than one of every three new jobs in Ireland over this period.

 

Mr McNally says: “Irish tourism has performed strongly throughout the year and we’re now approaching a record-breaking 8 million overseas visitors for 2015. This is an enormous achievement and a testament to the hard work of the thousands of tourism businesses throughout the country. Next year looks set to deliver further growth across our key markets such as Britain, North America and Europe - providing a further boost to hotels and guesthouses.”

 

The improved outlook for the tourism and hospitality sector means that hotel and guesthouse owners are now in a stronger position to invest in their business, with results showing that 92% of hoteliers are planning to invest in refurbishment and product development over the next 12 months while 62% are planning to increase their investment in marketing.

 

Mr McNally states that strong cut-through on the marketing front has reinvigorated Ireland’s tourism brand and image as a holiday destination. He says: “We continue to make significant strides in developing our tourism product and in giving holidaymakers new and compelling reasons to visit. Examples include the recently launched Ireland’s Ancient East trail and of course the Wild Atlantic Way, which is proving to be an enormous draw. Targeted investment in initiatives such as these is vital to the long-term success of our tourism product.”

 

Business tourism is another area of continued growth, supported by greater levels of activity in the domestic economy and increased success in capturing a larger share of the global conference and incentive travel market. Of those hotels catering for corporate meetings and business events, 71% are seeing an increase in this area of their business compared with last year.

 

Notwithstanding the upturn in tourism, Mr McNally notes that the benefits of the recovery are not being felt to the same extent throughout the country. He states that growth in occupancy levels continues to lag in areas outside the traditional tourism hotspots due to an over-reliance on the domestic market – which accounts for over 80% of revenues for many hotels and guesthouses outside the larger urban areas.

 

He cautions that many premises are operating from a low revenue base following the down turn which means the high cost of servicing overhanging debt is a serious challenge. This still weighs heavily on many hotels with some 34% saying they remain concerned about the viability of their business. Other challenges highlighted include the high cost of doing business in Ireland, which is stifling competitiveness with hoteliers facing excessive local authority rates, increasing labour costs and high utility costs.

 

Breakdown across Markets (Compared to last year)

  • Island of Ireland: 85% of hotels and guesthouses are seeing an increase in business from the island of Ireland (10% see no change; 5% see a decrease)

 

  • Britain:  Visitor numbers to Ireland from Britain are up 11% overall, with 82% of premises benefiting from an increase in business from Britain (14% see no change; 4% see a decrease)

 

  • North America: Visitor numbers to Ireland from North America are up 13% overall, with 58% of premises benefiting from an increase in business (35% see no change; 7% see a decrease)

 

  • Germany and France: Visitor numbers from the rest of Europe are up 14%. However, the impact of the recovery in these visitors was less widespread with 43% of premises benefiting from increased business from Germany (51% see no change, 6% see a decrease) and 31% of premises seeing an increase from France (60% see no change, 9% see a decrease)

 

Tourism’s Economic Contribution:

Tourism is one of Ireland’s largest indigenous industries and supports approximately 205,000 jobs – equivalent to 11% of total employment in the country. It accounts for almost 4% of gross national product (GNP). Last year, Ireland attracted 7.3 million overseas visitors and total tourism revenue was €6.45 billion, of which foreign exchange earnings in the economy amounted to €5 billion. This year, overseas visitor numbers are approaching a record-breaking 8 million. Based on projected rates of growth in overseas visitors, the IHF forecasts that Irish tourism as a whole is now on track to create a further 40,000 jobs by the end of the decade.

 

-ENDS-

 

NOTES TO EDITOR:

*Survey based on responses from owners and general managers of hotel and guesthouse businesses across the country and conducted during the first two weeks of December 2015.

 

FOR INFORMATION:

Eoin Quinn/Barry Ryan                                                 Dublin office: 01 6798600    

Weber Shandwick                                                          Mobile: 087 2332 191 / 085 7287 326            

 

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