Friday, 21st November 2008

ENERGY PRICES MUST DROP further
Abandoning Price Increases Positive Move, but Reductions Now Needed

The indication that Bord Gáis and the ESB are abandoning their planned price increases shows that the reality of the current economic climate is starting to become a factor in state energy providers’ decisions, says the Irish Hotels Federation (IHF) today. The IHF states that the Commission on Energy Regulation (CER), Bord Gáis and ESB should focus immediately on reducing prices given the costs of oil and gas on the international markets have plummeted in recent weeks to where a barrel of oil is $47 today (compared with $147 in July). If Ireland is to develop a strategy to recover from its current worsening economic conditions, a high priority must be given to providing energy at the lowest possible cost to assist Irish businesses regain competitiveness. Ensuring national competitiveness must be a priority, and the major reductions in international prices for oil and gas must be immediately reflected in the prices charged by the ESB, Bord Gáis and other energy providers. The IHF stated that this morning’s indications acknowledge the validity of the IHF’s position two weeks ago when it rigorously challenged any suggestion that the CER might ratify requests for increases by the ESB and Bord Gáis.

The IHF is now calling on the Government to instruct the Commission for Energy Regulation to force an immediate reduction in electricity and gas prices. This action would show clear leadership to support Irish industry in dealing with current economic challenges.

According to John Power, Chief Executive, IHF, state intervention is now required to ensure that state monopolies do not operate in isolation from the economic circumstances of the country.  “All businesses and individuals are in economic survival mode and, if Bord Gais and the ESB do not effect reductions, the State has a responsibility to step in and direct them to review their pricing structures and business models.  It is vital to the long term well being of the economy that we have a synergy of approach across all economic factors and the price of energy is key to achieving any return to stability”

The IHF had challenged requests earlier this month by the ESB and Bord Gáis to raise energy charges from January 1st  2009 as such increases were not justifiable in an environment of collapsing international energy prices. The hotel sector spends approximately €150m on energy annually, representing over 10% of operating costs of most hotels and guesthouses.  

“It is absolutely ridiculous that organisations such as the ESB and Bord Gáis are allowed to operate with disregard to the reality on the ground.  International oil prices are less than one third than what they were in July last, and they should never have even considered an increase. Utmost priority must be given to ensuring that international price reductions are reflected in the costs of gas and electricity to Irish consumers and businesses. Bord Gáis and the ESB are now indicating they are abandoning prices increases, but we need more. Now both suppliers must proceed to immediately reduce their prices,” he concludes.

ENDS

FOR INFORMATION:

Siobhan Molloy / Eoin Quinn               Tel: 01 6760168
Weber Shandwick                              Mobile: 086 817 5066 / 087 233 2191

Economic contributions of the tourism industry

Over the longer term, the tourism and hotel industries have achieved substantial growth and have invested in skills, marketing, technology, products and services and physical facilities. The main economic contributions of the tourism industry include:

• Almost €5 billion in foreign exchange earnings in 2007 compared to €2.1 billion in 1995 and €4.3 billion in 2005;
• 8.3 million visitors;
• Domestic tourism expenditure of €1.5 billion in 2007;
• Almost €3 billion in revenues to the exchequer from tourism in 2007;
• Tourism accounted for about 4% of GNP
• Hospitality industry accounts for 250,000 full-time, part-time and seasonal jobs;
• Greater spread of regional economic activity than most other industries;
• 7% of services exports;
• Provides a substantial entrepreneurial resource as the vast majority of tourism enterprises are small and medium enterprises.
• 57,000 people employed in the hotel and guesthouse sector – largest employer in the tourism sector.
• 920 hotels with 60,000 rooms.
• 360 guesthouses with 4,300 rooms.
• Total of 64,300 hotel and guesthouse bedrooms in Ireland.