Sunday 6th March 2011

IHF SURVEY: 84 % OF HOTELIERS CONCERNED ABOUT VIABILITY OF THEIR BUSINESSES FOR 2011
Lack of Cost Competitiveness Jeopardising the Viability of Irish Hotels Sector, Says IHF

A severe lack of cost competitiveness is having a detrimental effect on Ireland’s hotels sector with 84% of hoteliers concerned about the viability of their business in 2011 according to an industry survey* undertaken by the Irish Hotels Federation (IHF). Hotels and guesthouses point to local authority rates, wage costs and utility costs as the most pressing issues impacting on their businesses. The research was undertaken in advance of the IHF’s 73rd Annual Conference in the Slieve Russell Hotel in Co. Cavan and canvassed 180 hotel owners and general managers to get a greater understanding of how the economic downturn is affecting the day-to-day running of their businesses.

Compared with this time last year, 46% of respondents reported a decrease in overall business levels while 33% reported an increase and 21% indicated no change. While trading circumstances continue to be difficult, hotels and guesthouses generally expressed a more positive outlook for their businesses in 2011 compared with a similar survey in March 2010. When asked to assess the future trading conditions for their businesses in the year ahead:

• 30% indicated a positive outlook (March 2010:  11.5%)
• 33% indicated a neutral outlook (March 2010:  38.5%)
• 37% indicated a negative outlook (March 2010:  50%)

Results reveal that 72% of respondents have reduced staffing levels during the past year with 62% expecting further reductions in staffing levels during 2011:

•  47% of respondents foresee reductions of up to 5%
•  11% foresee reductions of between 5–10%
•  4% foresee reductions of over 10%  

“Tourism and the hospitality industry have a major contribution to make to our national recovery provided we have a business friendly competitive economic environment,” says Tim Fenn, Chief Executive of the IHF. “Our members are struggling under exceptionally high local authority rates and charges, wages costs that are the second highest in Europe and unsustainable energy costs. We urge the incoming Government to make cost competitiveness a priority so that tourism businesses can return to viability and economic success.”

Half of all respondents indicated they had experienced difficulties accessing standard credit facilities from their banks during the last 12 months while 28% indicated their banks had reduced their normal overdraft facility amount over this period of time. Not surprisingly, results reveal that 57% of respondents are putting future investment plans on hold while a further 20% are scaling back investment plans. 

* Survey based on responses from 180 hotel and guesthouse owners and general managers from across the country and conducted during the last week of February 2011.

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