Sunday 1st March 2009

Radical Measures Required to Safeguard Ireland’s Largest Indigenous Industry
Irish Hotels Federation Annual Report Reveals

Irish tourism is at a crossroads, facing one of the most difficult economic environments in decades. A major weakening in the second half of 2008 resulted in annual national tourism revenues falling to €6.3 billion compared to €6.5 billion in 2007. Speaking today at the launch of the Irish Hotels Federation’s (IHF) 2008 Annual Report and Review at its 71st Annual Conference in Killarney, John Power, Chief Executive, stated that now is the time for the Government to show strong leadership and bring all sections of the Irish economy with it in overcoming the national economic challenges. The future success of the Irish tourist and hospitality sector depends to a large extent on the stability of the Irish economy and while pain will have to be taken in the short term the longer term gains will justify the taking of the necessary measures.

According to Mr Power, the number of overseas visitors declined in 2008 for the first time in seven years (down 3%) while there was no growth in domestic expenditure for the first time in five years. Total overseas visitor numbers fell by an estimated 3% in 2008 while there was a slight increase in domestic trips.

Irish customers account for 64% of all bednights in Irish hotels; this is an increase of 5% on the previous year. This resilient performance in the domestic market counterbalanced, to some extent, the poor performances in the North American, British and mainland European markets which experience reductions in bednights of 23%, 15% and 7%, respectively. For the first time since 2002, average room occupancy showed a decline, falling to 58% – a level not experienced since 1994.

The effect of the decline in overseas visitors affected room occupancies in all regions of the country including Dublin which, prior to 2008, had been the primary region for growth. Declines were most pronounced in the South and Northwest of the country, reflecting the relative importance of US and British business, and were less marked in the West where they tended towards the national average. The high dependence on the home market continued with 68% of hotel bednights now coming from the island of Ireland (64% from the Republic of Ireland). This performance was in an environment where retail sales fell in volume by 5% in 2008 a trend that accelerated towards the end of the year.

Notwithstanding the downturn, the tourism industry made a direct contribution of 4% to overall GNP in 2008, making it our most important indigenous industry supporting an estimated 250,000 jobs, of which 60,000 are in the accommodation sector alone. With an estimated 2.1 million people presently at work in Ireland, tourism expenditure supports over 11% of those in employment.

Mr Power states, “We now find ourselves at a critical juncture having come through an extended period of development over the last decade. Competition internationally has intensified dramatically as emerging destinations come on stream and the downturn in world tourism gains momentum. Given the changing profile and needs of visitors, we must strive to provide a product that is dynamic and innovative and that offers visitors, both overseas and domestic, an experience of Ireland that is positive, memorable and beyond their expectations.”

“Tourism remains a largely Irish-owned sector of enterprise with immense long term potential for job creation, national wealth creation and regional development. The tourism sector continues to be comprised predominantly of thousands of small and medium sized businesses employing people locally in every town and village and delivering substantial economic and social benefits across the country.”

Mr Power maintains that, while ambitious tourism targets for reaching 10 million visitors by 2012 set out may not now be met, the long term prospects for tourism remain strong providing Ireland confronts the challenges posed by being internationally competitive and being an attractive destination. He states, “Government action is a key determinant of the success of Irish tourism as a sector of innovation, investment opportunity and enterprise. Central to this success is a recovery of competitiveness which has been lost in recent years and a capability to respond with flexibility to changes in the market place. The utmost urgency must now be attached to restoring competiveness within the wider economy and reducing our costs and prices so that they are in line with the rest of the European Union.”

There are now 921 hotels with 60,600 bedrooms and 337 guesthouses with 4,071 bedrooms in Ireland. The number of people employed in hotels and guesthouses is approximately 60,000, making IHF members the largest employers in the tourism sector and a major employer in the overall economy.

Visitor Numbers 2008

FOR INFORMATION:
Siobhan Molloy/Eoin Quinn              086 8175 066 / 087 2332 191
Weber Shandwick                             

HOTEL & GUESTHOUSE STATISTICS 2008
71st IHF ANNUAL CONFERENCE

Sunday 1st - Tuesday 3rd March 2009

• 7.5 million overseas visitors to Ireland in 2008, a 3% decline on 2007.
• Tourism accounted for 4% GNP in 2008
• €4.8 billion foreign exchange earnings in 2008 compared with €4.9 billion foreign exchange earnings in 2007.
• Total tourism revenue in 2008 decreased to approximately €6.3 billion compared to €6.5 billion in 2007.
• 60,000 people employed in the hotel and guesthouse sector – largest employer in the tourism sector.
• 921 hotels with 60,600 rooms (904 hotels with 58,498 rooms in 2007).
• 337 guesthouses with 4,071 rooms (355 guesthouses with 4,222 rooms in 2007).
• Total of over 64,500 hotel and guesthouse bedrooms in Ireland.