Horwath Bastow Charleton Survey Reveals Positive Results For Irish Hotel Industry

Dublin Hotels Dramatically Outperform All Other Markets

Outlook Is One of Guarded Optimism - But HBC Hotel Expert Says Maintaining and Increasing Visitor Numbers is Single Greatest Challenge Facing Industry

Dublin, June 24 th, 2004 – Horwath Bastow Charleton, one of Ireland's leading Chartered Accountancy and Business Advisory practices, specialising in the hotel industry, today announced the results of the annual Horwath Bastow Charleton Ireland and Northern Ireland Hotel Industry Survey.

The results of the survey show that 2003 proved to be a more positive year than had been predicted. While growth was modest, profitability increased for nearly all hotel categories and regions. However, it is the Dublin hotel market that has emerged as the clear winner in 2003, with a dramatic increase in average room rates. Dublin hotels also experienced an increase in occupancy rates and profitability before tax and it is for these reasons that hotels in the capital are clearly leading the way in terms of increased performance.

“We are finding that an increase in the number of visitors that are coming through Dublin is having a positive ripple effect on the hotel industry in the area,” said Colm Deignan, Partner, Horwath Bastow Charleton. “The growing number of visitors coming through Dublin Airport during 2003, coupled with increased economic activity in the Dublin area, has meant that the capital city and it’s environs are the outstanding performers in 2003.”

However, while the results are largely positive, the industry outlook is one of guarded optimism and Horwath Bastow Charleton warns that maintaining and increasing the visitor numbers to Ireland is the single greatest challenge facing the industry. Deteriorating satisfaction levels concerning pricing, is a major concern and one, Horwath Bastow Charleton suggests, the industry must address as it looks to the future.

Continued Deignan: “If future targets of 10 million visitors per year by 2012 are achieved, then additional hotels will be required. Promoters of new hotel projects need to proceed with caution to ensure that they are providing hotels in the right locations, to correct standards and of appropriate size for the market in their area.”

Several key findings of the survey include:

• The Dublin hotel market is star-performer with the knock-on effect being that hotels in the Midlands and Eastern regions are also performing well, especially with business travellers. Business travel to the Midlands and Eastern regions is up by 9.2% over the same period in 2002.

• Mid-price hotels throughout the country are outperforming all other classification of hotels in terms of profit growth

• Overall average room rates have increased by approximately 2%

• Overall occupancy rates have increased by 1% to 65.8%

• Tighter control of costs have paid off for larger hotels with an increase in 3.7% increase in pre-tax profits for this group

While the majority of news is positive for the industry as a whole, the Western Seaboard and the South West regions have not performed at the same level as their counterparts throughout the country.

Continued Colm Deignan: “Our survey has found that hotels along the Western Seaboard have shown a sizeable decrease in profit. Occupancy levels in both the Western Seaboard and the South West continue to fall and this is a worrying trend for the future. It is essential that the significant investment being made on the National Primary Routes be continued so that all major urban areas and their environs can be accessed more easily. This is likely to result in improvements in the performance of hotels and resort properties in these regions.”

The Horwath Bastow Charleton Ireland and Northern Ireland Hotel Industry Survey is carried out on an annual basis. Leading hotels throughout the island of Ireland are surveyed on a number of topics including: Room occupancy average; average daily room rate; revenue per room and profit before tax per available room.

About Horwath Bastow Charleton

Horwath Bastow Charleton is one of Ireland's leading Chartered Accountancy and Business Advisory practices. Horwath Bastow Charleton is the representative firm in Ireland of Horwath International, a worldwide group of independent accountancy firms with over 400 offices in 370 cities and 16,000 staff.

FOR FURTHER INFORMATION AND TO ARRANGE INTERVIEW OPPORTUNITIES CONTACT:

Deirdre McNamara
Direction@JWT Public Relations
01 6765678 – 087 2391199
deirdre.mcnamara@direction.jwt.ie