According to the Northern Ireland Hotels Federation (NIHF), hotel occupancy decreased by 40% year-on-year in Northern Ireland in 2020.
As reported by The Irish News, the NIHF said that while the number of hotel bedrooms in Northern Ireland rose to an all-time high of 9,580 in 2020, occupancy rates decreased to 31% from 71% in 2019 due to the COVID-19 pandemic, which caused the Northern Irish hotel sector's contribution to Northern Ireland's economy to decrease by approximately £450 million year-on-year last year to less than £200 million from approximately £650 million in 2019.
The NIHF said that Northern Irish hotels were open for just 86 days of normal trading last year, and that the NI hotel sector is unlikely to start to recover until the second quarter of next year, and normal market conditions and growth are unlikely to resume before 2024, due to ongoing business restrictions to slow the spread of COVID-19.
Current Costs
According to the NIHF, the NI hotel sector is burning through £2 million to £2.5 million per week on fixed costs outside of loan and mortgage of furlough costs at present.
The Irish News quotes the NIHF as saying, "Many do not understand that closed hotels continue to incur costs at a considerable level; heat, light and staffing. The majority require personnel in situ 24 hours per day over the course of lockdown.
"A simple metric highlighting the stark reality of the situation, is that fixed costs for a hotel property equate to an outlay of £1,000 per bedroom per month."
The NIHF also said that the NI hotel sector has spent £7 million on complying with COVID-19 regulations, but that there has been limited financial support, and the sector's weekly furlough costs are £250,000.
Call For Support Measures
The NIHF added that full business rates relief this year and next year and an extension of the 5% VAT reduction are essential for the sector's recovery, and called for "appropriate grants" for bigger hotels with a rateable value over £51,000, a "kickstart grant" to cover the costs of reopening, and for Stormont to continue the Localised Restrictions Support Scheme during the lockdown period and to launch promotional campaigns and fiscal stimulus for the sector when a reopening date is revealed.
The Irish News quotes the NIHF as saying, "Until the current health crisis is under control, it would be futile to work to a specific date.
"This uncertainty only adds to the need for support. The hotel sector is a pillar of the tourism industry and plays a significant role in hospitality. Support and an extension of some measures already in place should ensure the survival of the sector and allow the industry to return to its 2019 levels of trading in a manageable way."
© 2021 Hospitality Ireland – your source for the latest industry news. Article by Dave Simpson. Click subscribe to sign up for the Hospitality Ireland print edition.
