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04.03.2019

HOTELIERS CALL FOR URGENT ACTION ON RISING INSURANCE COSTS

 

  • Annual insurances costs reach €69 million per annum
  • Majority of hoteliers (75%) say costs having a “significant negative impact” on their business
  • Two out of three say insufficient progress is being made on insurance reform

 

Killarney, 4th March 2019             Soaring insurance premiums are having a detrimental impact on cost competitiveness within the hotel sector with some 78% of hotels reporting further increases in insurance costs in the past 12 months, according to the latest industry survey by the Irish Hotels Federation (IHF). Of these, the average increase in premiums was 15%. This is in addition to substantial increases in recent years. Tim Fenn, Chief Executive of the IHF called for urgent action by the Government to address escalating insurance costs which have now reached an unsustainable level, averaging €1,150 per guest bedroom annually.

 

With 75% of hotels saying that excessive insurance costs are having a significant negative impact on their business, Mr Fenn said: “The time for foot dragging is long past. The Government must now deliver concrete results in relation to insurance reform. Progress has been extremely slow to date and this inaction is having serious consequences for the viability of hotels and other tourism businesses. The exorbitant levels of awards and lack of consistency is also making Ireland less attractive for insurers and we are seeing an increasing number that are no longer willing to provide cover to hospitality businesses. This in turn is reducing competition in the insurance market and driving up costs.”

 

“With levels of awards now running at up to five times those in the UK, it is particularly frustrating that we still do not have a firm timeline for legislation setting up a judicial council to review levels of awards made by the courts. This has effectively stalled and is very worrying given the detrimental impact escalating insurance premiums are having on our competitiveness, which is ultimately borne by the consumer.”

 

While welcoming proposals by the Government for the setting up of an interim committee to look at personal injury claims, Mr Fenn said: “This is very much a stop-gap measure. There remains a lack of clarity around how soon such a committee would produce revised guidelines on levels of compensation, which are currently severely out of kilter with other countries.

 

“Levels of fraudulent and exaggerated injury claims are another major concern for our sector and one where there has been an inexcusable lack of progress. We are calling for a zero tolerance approach to fraud and for urgent priority to be given to establishing a dedicated resource within the Garda Síochána specifically tasked to investigate fraudulent cases. This should go hand in hand with the referral of fraudulent claimants for prosecution. This is an area where insurers, the legal system, Garda Síochána and Government have a vital role to play.”

 

-ENDS-

 

FOR INFORMATION:

Ger McCarthy / Seán Lawless                                    Dublin office: 01 6798600

Weber Shandwick                                                        Mobile: 086 233 3590 / 085 11 676 40

 

 

 

Notes to Editor:

 

 

Tourism sector at a glance

  • 10.97 million overseas visitors
  • Tourism accounts for almost 4% GNP
  • Total tourism revenue of €9.42 billion in 2018
  • Tourism industry has created over 94,000 new jobs since 2011. It now supports over 260,000 jobs - equivalent to 11% of total employment in Ireland with over 60,000 of these jobs in the hotels sector alone
  • €7.47 billion in foreign exchange earnings
  • €1.95 billion in domestic tourism revenue in 2018
  • 827 Hotels (824 in 2017) and 59,609 Hotel bedrooms (58,425 in 2017)
  • 170 Guesthouses (unchanged) and 2,260 Guesthouse bedrooms (2,450 in 2017)
  • Total of 61,865 hotel and guesthouse bedrooms in Ireland (60,875 in 2017)

 

About the IHF

Founded in 1937, the Irish Hotels Federation is the national organisation of the hotel and guesthouse sector in Ireland. It represents almost 1,000 hotels and guesthouses nationwide, employing over 60,000 people and is a key stakeholder in the Irish tourism industry.

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