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04.03.2019

IRISH HOTELS FEEL BREXIT EFFECT

Hotels and Guesthouse Report Sharp Drop in Business Sentiment

 Monday, 4th March 2019             Business sentiment amongst Irish hotels and guesthouses has deteriorated sharply year on year, representing a stark change in outlook compared with 2018 according to the Irish Hotels Federation (IHF). An industry survey* undertaken by the IHF ahead of its annual conference in the Gleneagle Hotel & INEC, Killarney, Co Kerry, reveals that only 40% of hoteliers now have a positive outlook for their business over the next 12 months. This compares with 79% who reported a positive outlook at the start of 2018.

 Major concerns for the sector include the continued risk of a disruptive Brexit and reduced competitiveness due to the hike in tourism VAT, increases in the cost of doing business and growing economic uncertainty internationally. In particular, the higher VAT rate is putting investment in additional hotel capacity at risk, with 75% of hoteliers stating they are now reassessing plans to increase capital investment as a result of the increase.

 Performance so far this year has been mixed, with 39% of hoteliers reporting a drop in overall business levels compared to this time last year while 48% report an increase. This has largely been driven by growth from North America and Europe, which is masking continued poor performance of the UK market. Almost two thirds of hoteliers (65%) say advance bookings for 2019 from the Great Britain are down while almost six in ten (57%) are seeing a fall in advance bookings from Northern Ireland. 

 With the vast majority of hoteliers (91%) concerned about the impact Brexit will have on their business over the next 12 months, Michael Lennon, President of the Irish Hotels Federation says growth in recent years cannot be taken for granted. “With the prospect of a disruptive Brexit looming, the sharp fall in business sentiment amongst hoteliers is not surprising. Our fear is that regional tourism businesses risk being hardest hit, especially those operating in areas that are heavily reliant on seasonal and UK markets. Many of these regions have only begun to feel the benefits of the economic recovery in recent years.”

 Mr Lennon states: “Tourism plays a vitally important role as an engine of growth and regional economic balance. However, this could be put at risk if the Government does not take decisive action to mitigate the impact of Brexit and address the other serious challenges we now face such as the high cost of doing business in Ireland.”

 “Tourism is an exceptionally competitive activity. We compete daily for business at both a domestic and international level and every tourism Euro spent by overseas and domestic tourists in Ireland is hard won. Maintaining our competitiveness is absolutely vital to sustaining the growth of the industry, which supports jobs in every country and town.”

“With 70 per cent of tourism jobs based outside of Dublin, tourism’s wide geographic distribution is critical to sustaining regional economies, and addressing the rural imbalance. And, as the biggest investor in Irish tourism, the hotels sector is playing a critical role. Hotels and guesthouses not only provide local employment opportunities, we buy local services, source locally produced food and provide a vital infrastructure in support of local business and communities,” he added.

 Welcoming the Government’s commitment last year to introduce a Tourism Satellite Account within the Central Statistics Office (CSO), Mr Lennon called for it to be implemented as a priority. “This account will provide a full analysis of the economic activity in the tourism industry and show how much it contributes to each county throughout the country to inform future taxation and economic policy,” he said. 

 

Breakdown of advance bookings across markets compared to this time last year:

 Domestic market: 40% of hotels and guesthouses are reporting an increase in visitor numbers from across Ireland compared to this time last year with 35% seeing no change and 25% noting a decrease. 

 Britain: Only 3% are noting an increase in visitor numbers from Britain, with 32% seeing no change, and 65% seeing a decrease. 

 Northern Ireland:  6% of premises are noting an increase with 37% saying they have seen no change, while 57% see a decrease.

 United States: 37% of premises are noting an increase, while 47% have seen no change and 15% note a decrease.      

 Germany: 10% of hotels and guesthouses are reporting an increase, with 69% saying they have seen no change and 20% seeing a decrease. 

 France: 19% of hotels and guesthouses are noting an increase, with 69% saying they have seen no change and 11% seeing a decrease.

 

-ENDS-    

 

FOR INFORMATION:

Ger McCarthy / Seán Lawless                                    Dublin office: 01 6798600

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

 Notes to Editor:

 ¹ Survey based on responses from owners and general managers of hotel and guesthouses businesses across the country and was conducted during February 2018.

 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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