HOTELIERS MORE UPBEAT ACCORDING TO INDUSTRY SURVEY
71% are concerned, however, about the future viability of their business
· 51% of hoteliers indicate a positive outlook for trading conditions
· 53% are seeing an increase in business compared with this time last year
· 90% of hoteliers say the reduced tourism VAT rate has boosted their business
Irish hoteliers are more optimistic about the outlook for the tourism sector according to an industry survey* undertaken by the Irish Hotels Federation (IHF). Overall confidence levels are up on last year with 51% of respondents indicating a positive outlook for trading conditions for their business over the next twelve months (14% had a negative outlook while 35% had a neutral outlook).
On a national basis, 53% of hoteliers are seeing an increase in business levels compared to this time last year (29% report a decrease and 18% report no change) with key city destinations such as Dublin, Cork and Galway benefiting from event and business-related tourism. Growth is also evident in the East and Midlands regions, the South East and parts of the West coast. However, occupancy levels continue to lag in the Shannon region and the South West.
The Government’s decision to reduce tourism VAT to 9% has provided a vital stimulus for hotels and guesthouses according to the survey with 90% of hoteliers saying the measure has boosted their business. As a result of this, 42% of respondents say they are likely to take on additional staff over the next 12 months.
Key Challenges
- Despite the more positive outlook for 2013, 71% of hoteliers remain concerned about the future viability of their businesses.
- The vast majority (96%) are concerned that the Government may not retain the reduced VAT rate next year.
- Hoteliers cite excessive local authority rates and high electricity and gas prices as the most pressing issues stifling cost competitiveness within the sector.
- Limited availability of credit is still an issue for a significant number of hoteliers with 31% (compared 36% 2012) of respondents indicating they have experienced difficulties accessing standard/normal credit facilities from their banks during the last year.
Speaking in advance of its annual conference in Killarney (March 4th & 5th), Tim Fenn, Chief Executive of the IHF states: “The sector is now on a firmer footing following a number of pro-tourism initiatives by the Government such as the reduced tourism VAT rate, which has provided a key competitive advantage when marketing Ireland as a tourism destination.”
Mr Fenn , urged the Government, however, to provide greater medium term certainty around the retention of the 9% VAT rate so that international tour operators, who book accommodation services some 18 months in advance, can plan their trips to Ireland with greater certainty on pricing.
He says: “While the rate reduction has greatly benefited tourism business, it needs to be more than just a short term measure if we are to achieve sustained growth in visitor numbers. This is particularly important for domestic and international tour operators which are a vital component of the hotels sector.”
Hotel & Guesthouse Market Performances Year-to-Date
Results indicate that business levels are up in the domestic market with 53% of respondents seeing an increase in business from the island of Ireland. This contrasts with 22% who are experiencing static business levels and 25% who are seeing a decrease in business from the domestic market.
Only 17% of respondents are seeing an increase in business levels from Britain while 36% see a decrease and 47% see no change. Respondents are more positive about the US market with 31% seeing an increase in business (19% see a decrease; 50% see no change).
Results indicate mixed performances for both Germany and France, Ireland’s two biggest markets in continental Europe. Compared with this time last year, 20% of respondents are seeing an increase in business from Germany (17% see a decrease; 63% see no change;) while 14% are seeing an increase from France (19% see a decrease; 68% see no change).
-ENDS-
FOR INFORMATION:
Eoin Quinn / Siobhan Molloy Dublin office: 01 6760168
Weber Shandwick Mobile: 087 233 2191 / 086 817 50 66
NOTES TO EDITOR:
*Survey based on responses owners and general managers of hotel and guesthouse businesses across the country and conducted at the end of February 2013.