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09.07.2015

HOTELIERS REPORT POSITIVE OUTLOOK FOR SUMMER SEASON

90% of Premises Report Increased Business Levels for First Six Months of 2015

 

·         83% of hoteliers seeing an increase in advance bookings for the summer season

·         79% reporting an increase in domestic visitors compared to last year

·         85% plan to invest in refurbishment and increased capital expenditure over next 12 months

·         28% of hoteliers remain concerned about the viability of their business

 

Thursday 9th July 2015: The vast majority of Irish hotels and guesthouses have seen an upturn in business during the first six months of 2015 according to the latest quarterly barometer from the Irish Hotels Federation (IHF). With overseas visitors up 12% year to date, the industry survey reveals that nine out of ten (90%) hoteliers across the country report an increase in business levels compared to the same period last year.

 

The strong performance so far this year is continuing into the peak summer season with 83% of premises reporting an increase in advance bookings over the coming months. Bookings are up year on year across all key markets including North America, Britain and the rest of Europe. Following two years of robust recovery in overseas visitors, 87% of hoteliers now have a positive outlook for their business trading conditions over the next 12 months.

 

This positive outlook is also being supported by a stronger domestic economy, with home-grown tourism starting to recover following years of subdued consumer confidence. Four out of five hoteliers (79%) report growth in business levels from the island of Ireland as increasing numbers of people take holidays and short breaks at home and spend more money on leisure activities. This is vital for regional tourism and provides a boost for businesses that rely on the home market, particularly outside of the larger urban areas and traditional tourism hotspots. The recovery, however, is from a low revenue base following the downturn and is not evenly shared throughout the country with many hotels continuing to face challenging conditions.

 

Business tourism is another area of growth, supported by increased activity in the domestic economy and success in capturing an increasing share of the global conference and incentive travel market. Of those hotels catering for corporate meetings and business events, 65% are seeing an increase in this area of their business compared with last year.

 

Stephen McNally, President of the IHF, states that confidence among hoteliers has reached an all-time high since the downturn and continues to improve as the recovery in tourism strengthens. He says: “We’re on track for another year of robust growth in tourism, with overseas visitors likely to reach 7.8 million by year end. Now that the peak summer season is under way, advance bookings for the remainder of the year are up across the board. This is having a very positive impact on sentiment throughout the sector with the majority of businesses planning to take on additional new staff over the next twelve months.”

 

Mr McNally states that the upturn in Irish tourism is being underpinned by a number of supportive measures from the Government and by highly effective marketing initiatives from Fáilte Ireland and Tourism Ireland that continue to grow visitor numbers.

“We’re achieving strong cut through on the marketing front and this is helping to reinvigorate our tourism brand and image as a holiday destination,” says Mr McNally. “Growth in tourism revenues is particularly strong from North America, with visitors up almost 14% so far this year. Many of these are high-spending tourists who travel around the country during their stay, providing a boost to local economies. We’re also seeing significant growth from Britain and the rest of Europe – which are vital markets for the industry.”

 

Mr McNally states that the improved outlook for the industry means hotel and guesthouse owners are now in a stronger position to invest in their business with results showing that 85% of hoteliers are planning to invest in refurbishment and product development over the next twelve months while 67% are planning to increase their investment in marketing.

 

Notwithstanding the upturn in tourism nationally, 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. 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 continues to weigh heavily on many hotels with some 28% saying they remain concerned about the viability of their business.

 

Other challenges highlighted by hoteliers include the high cost of doing business in Ireland, hotels and guesthouses citing excessive local authority rates as the single most pressing issue stifling cost competitiveness within the sector.  This is followed by high labour costs, utility costs and subdued consumer confidence.

 

Breakdown across Markets (Compared to same period last year)

  • Island of Ireland: Year to date, 79% of hotels and guesthouses are seeing an increase in business from the island of Ireland (13% see no change; 8% see a decrease)

 

  • Britain:  Visitors numbers from Britain are up 10%, with 75% of premises benefitting from an increase in business from Britain (20% see no change; 5% see a decrease)

 

  • North America: Visitor numbers from North America are up 14%, with 66% of premises experiencing an increase in visitors from this market (19% see no change; 5% see a decrease)

 

  • Germany and France: Visitor numbers from the rest of Europe are up 14%, with 39% of hotels and guesthouses benefitting from increased business from Germany (51% see no change, 10% see a decrease) and 32% of premises seeing an increase from France (56% see no change, 12% 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. Overseas visitors are expected to reach 7.8 million this year.

 

As a result of a number of pro-tourism measures, such as the 9% tourism VAT rate and zero rate travel tax, the tourism and hospitality businesses now support an additional 33,000 new jobs compared with 2011. This accounts for more than one of every three net new jobs created in Ireland over this period. 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 at the end of June 2015.

 

FOR INFORMATION:

Eoin Quinn/Barry Ryan                                                  Dublin office: 01 6798600    

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