Consultancy services firm Crowe's annual Hotel Industry Survey has found that hotel room revenue growth outside of Dublin has overtaken growth rate in the capital as State policymakers' focus on better spreading the benefits of the tourism boom begins to bear fruit.
However, the survey's authors warm that hotels face a "concerning" slowdown in food and drink revenues as a result of competition from a boom in new restaurants and alternative wedding venues, according to The Irish Times.
The survey also suggests that the local authority commercial rates system be utilised to extract a higher take from booming city hotels rather than raising the tourism industry's special 9% VAT rate.
Furthermore, the survey's authors recommend that Irish hotels forge links with Airbnb, which Crowe asserts will deliver bookings at cheaper commission rates than booking sites such as Booking.com as Airbnb moves closer to the hotel market.
Occupancy And Room Rates
Occupancy rose from 74% to 75.4% across Ireland last year, with the national average rate being up over €7 to €111.25 while the average Dublin rate was close to €137 per night. Meanwhile, Dublin room rates rose at just below the national average and at less than half the growth rate recorded in 2016, while rates rose 8% in the southwest and by nearly 10% on the western seaboard.
Payroll Costs
Crowe Ireland partner Aiden Murphy told The Irish Independent that the most significant threat to the hotel's sector current profitability is payroll cost increases.
He commented, "There is a concern that the payroll cost for hotels, which was 34.5pc of revenue in 2017, could return to much higher levels. Going back seven years, it would have been as high as 38% or 39%."
Murphy also noted that the cost of living in Dublin could incite hotel workers to seek hospitality jobs outside of the city, saying, "There's a concern for certain staff in Dublin about the cost of living increasing."
© 2018 Hospitality Ireland – your source for the latest industry news. Article by Dave Simpson. Click subscribe to sign up for the Hospitality Ireland print edition.
