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17.07.2017

STAYCATIONS INCREASE AS HOTELIERS REPORT POSITIVE OUTLOOK FOR SUMMER SEASON

Hotel industry barometer also shows signs Brexit is biting

 

·         7 in 10 hoteliers say domestic tourism is up 

·         Increases in US, Germany and France business levels, but UK falling

·         91% plan to invest in refurbishment/increase capital expenditure

 

Irish hotels and guesthouses have seen an increase in business levels during the first six months of 2017 according to the latest quarterly barometer¹ from the Irish Hotels Federation (IHF).  As the latest CSO² figures show overseas visitors up over 3% to the end of May, the industry survey shows that the domestic market is increasing also with seven in ten (71%) hoteliers saying business levels are up compared to this time last year. Overall, three quarters (76%) of hoteliers are reporting increased levels in business year on year. 
 
The strong performance for domestic tourism looks set to continue into the busy summer season. Over two thirds (68%) of hoteliers say bookings are up while six in ten (59%) report that advance bookings for staycations for the remainder of 2017 are up too.  The general outlook for the rest of the year appears positive overall and Ireland looks on course to surpass the 8.8 million overseas visits set last year. More than half of hoteliers (52%) report increases in advance bookings from the United States, 35% for Germany and 27% for France.  
 
However, IHF President Joe Dolan warned that Brexit is already impacting on tourism performance.  “Visitor numbers are up, which is good news and the growth in domestic tourism is particularly encouraging as it extends beyond the traditional tourism hot spots and its impact on local economies can be felt more widely. However, the latest CSO figures show a continued fall in UK visitors, our biggest market, which illustrates the fragility of the tourism recovery.” 
 
Mr Dolan stated: “Many of the consequences of Brexit are largely outside our control, so it is imperative that we mitigate the risks and potential damage where we do have some control over our destiny. Continued growth remains a priority for the sector, which is the country’s largest indigenous employer. It is achievable but it requires specific actions.  Ireland’s competitive tourism offering will certainly help and this is underpinned by important measures as the zero rate travel tax and the 9% tourism VAT rate which brings us into line with other countries in Europe.
 
“We must also continue to invest in product development and marketing. Enormous strides have already been made in the development of our products and brands including the Wild Atlantic Way, Ireland’s Ancient East and ‘Dublin – A Breath of Fresh Air’, for example. However, there are many rural areas that are just beginning to feel the tourism recovery. The UK market in particular provides the widest spread of visitors across rural Ireland and the broadest seasonality.  Nine out of ten (91%) hoteliers believe more needs to be done in terms of regional marketing in particular. Time and time again, Irish tourism has shown itself to be an excellent investment with every euro spent in destination marketing by the state resulting in €34 being spent by visitors in the country.”
 
Meanwhile, the latest IHF barometer also has good news for school leavers and those seeking a career in the hospitality sector.  Some 50,000 new jobs have been created in tourism since 2011 andthe industry is on track to create a further 40,000 jobs nationally by 2021. According to the latest barometer three in five (61%) hoteliers have recruited new staff over the past 12 months and nearly three in ten (29%) are planning to increase staff numbers over the next 12 months.  Mr Dolan said that the industry is looking to recruit over 6,000 entry-level employees each year across all areas of its operations. The tourism industry now supports approximately 230,000 jobs - equivalent to 11% of total  employment in Ireland.  
 
Increased confidence is also allowing hoteliers to invest more freely in their businesses with almost all hotel and guesthouses (91%) indicating that they intend to invest in refurbishment and increased capital expenditure within the next year.  Most (94%) of these are planning refurbishment projects while over a third (37%) intend to invest in new technology for the properties. One in five (20%) plan to expand their existing premises. 
 
However, insurance remains a pressing issue for all hoteliers. Over half (51%) report that rising costs are having a very significant impact on their businesses. Insurance costs for the sector have now reached €42 million this year, equivalent to approximately €730 per bedroom per year. Mr Dolan welcomed the commitment of the Government and the Tánaiste and Minister for Enterprise and Innovation Frances Fitzgerald to address the spiralling cost of insurance. However, he said that compensation pay-outs are not benchmarked internationally with the result that Irish compensation levels for injuries continue to be out of kilter when compared with other countries. “When genuine accidents take place in hotels, guests should be rightly compensated. However, the vast majority of claims in the hotel sector concern minor injuries and the higher compensation pay-outs recommended by the updated Book of Quantum are putting pressure on insurers to increase their reserves significantly.” 
 
Breakdown across markets (compared to the same period last year)
 
Domestic market: 71% of hotels and guesthouses are reporting an increase in visitor numbers from across Ireland with 22% seeing no change and 6% noting a decrease. 
 
Britain: Just 9% are noting an increase in visitor numbers from Britain, with 34% seeing no change, and 57% seeing a decrease.   
 
United States: 63% of premises are noting an increase, while 30% have seen no change and 7% noting a decrease.      
 
Germany: 43% of hotels and guesthouses are reporting an increase, with 49% saying they have seen no change and 8% seeing a decrease.  
 
France: 30% of hotels and guesthouses are noting an increase, with 64% saying they have seen no change and 5% seeing a decrease.
 

Irish tourism sector at a glance

·         Tourism accounts for almost 4% GNP

·         Irish tourism set to increase 40,000 jobs by 2021

·         Tourism industry as a whole now supports approximately 230,000 jobs - equivalent to 11% of total employment in Ireland with almost 60,000 of these jobs in the hotels sector alone

·         Overseas visitors to Ireland have increased by 3% for Jan-May 2017 compared to the same period in 2016

 

-ENDS-     

 

​Notes to Editor:

¹ Survey based on responses from owners and general managers of hotel and guesthouses businesses across the country and was conducted at the end of June 2017.

²http://www.cso.ie/en/releasesandpublications/er/ot/overseastravelmarch-may2017

 

 

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