Irish hotels and guesthouses are more optimistic going into 2015 with 90% saying they have a positive outlook for the next twelve months, according to the latest Hotel Barometer from the Irish Hotels Federation (IHF). However, despite this renewed sense of confidence, the hotels sector continues to operate from a low revenue base following the recession and some 41% of hoteliers say they remain concerned about the viability of their business.

 

With overseas visitors up over 8% this year (Jan-Nov) according the latest figures from the CSO, 86% of hoteliers are reporting an increase in business levels for 2014. The sector is benefiting from increased levels of tourism from all key markets including North America (up 15%), Britain (up 8%) and Continental Europe (up 6%).

 

There is also cause for optimism in the home market following years of subdued consumer confidence, with people gradually starting to take more trips at home and spend more money in the local economy. This has been evident in the run up to Christmas with 84% of hoteliers reporting that Christmas bookings, including parties, are either the same or better than last year. 

 

“Ireland is now firmly back on the global tourism map following two years of impressive growth. This is good news for the economy as a whole,” says Stephen McNally, President of the IHF. “However, many rural areas have not fared as well given their over-dependence on local consumer spending and the difficulty encouraging visitors to venture outside the main tourism hotspots. This is a major challenge given the vital contribution tourism makes to local economies.”

 

The Hotel Barometer shows that the upturn is contributing to further jobs growth with two out of three (66%) hotels and guesthouses taking on additional staff in 2014 while 86% say the Government’s decision to retain the 9% tourism VAT rate will assist them to take on further staff in 2015. The measure, which brought Ireland more closely in line with the tourism VAT rates of competitors across the rest of Europe, has contributed to the creation of 33,000 jobs in the hospitality and tourism industry since its introduction in 2011. As a whole, Irish tourism now supports approximately 205,000 jobs - equivalent to 11% of total employment in the country and accounting for 4% of gross national product. 

 

Mr McNally notes that, according to Fáilte Ireland, tourism is expected to contribute €6.5 billion in revenues to the economy and generate €1.9 billion in taxes for the Government this year. He says: “Irish tourism has shown itself to be an excellent investment for the country. However, it is one that we need to nurture if it is to continue to deliver returns.”

 

“Despite constrained resources, our industry has significantly upped its game on the marketing front, with targeted programmes from Fáilte Ireland and Tourism Ireland achieving strong cut through in reinvigorating our tourism brand and Ireland’s image as a holiday destination. We have, without doubt, become more imaginative in developing our tourism product and in giving holidaymakers new and compelling reasons to visit. Excellent examples include the already hugely successful Wild Atlantic Way and the East/South-East Heritage Trail due to be launched next year.” 

 

“However, since the downturn, Government funding for tourism marketing and product development has been cut back substantially. Our tourism bodies have been operating under very constrained budgets which puts the long-term sustainable growth of our industry at risk,” says Mr McNally. “There is now a pressing need to ensure sufficient funding is allocated. At the very least, this would require funding to be returned to 2012 levels if we are to maximise tourism’s growth potential.”

 

Mr McNally notes that, while hotel revenues remain significantly below those achieved six years ago, increased confidence in the sector is feeding into greater levels of investment by hoteliers. Some 86% plan to increase investment in refurbishment and product development in 2015 while 77% plan to increase their investment in marketing.

 

Market Overview (Breakdown)

 

 

Pressing Issues Affecting Hotels and Guesthouses

 

 

 

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