The Irish Hotels Federation’s (IHF) 87th Annual Conference is taking place this week in the Gleneagle Hotel & INEC in Killarney.
Increasing business costs, lower occupancy levels, and growing global economic and political uncertainty, are among the pressing concerns facing hoteliers, according to research from IHF.
“Last year was very difficult for many businesses within our sector due to what can only be described as relentless increases in the cost of doing business," said Michael Magner, IHF President. "This has been a persistent challenge for hotels and the wider hospitality industry since 2022 with no let-up in sight."
He added, "The situation has been compounded by the decision to increase the rate of hospitality VAT, which has hit food service businesses particularly hard."
The conference comes as recent industry research carried out by the IHF shows a drop in business levels within the sector. In 2024, the average national hotel room occupancy stood at 74% for the year as a whole, down 2% on the previous year when an occupancy rate of 76% was achieved.
With most regions seeing a drop in occupancy levels, IHF said a significant disparity continues to exist across the regions, ranging from 70% occupancy in the border region to 81% in Dublin.
Furthermore, business sentiment among hoteliers for the year ahead is down for a second year running with 37% of hoteliers reporting a positive outlook for trading conditions over the next 12 months. This contrasts with 47% who reported a positive outlook this time last year and 74% the previous year.
The federation said this is reflected in forward bookings, which are pacing behind 2024. Compared to the same time last year, hoteliers are reporting a further drop of 2% in business levels on the books for 2025, equivalent to €100 million in bookings.
While results indicate that the domestic market and North America are holding up so far, hoteliers are reporting a net drop in bookings from Great Britain, Northern Ireland and the Rest of Europe.
Magner said there is a lot more that the government can do to assist businesses in labour intensive industries such as hotels. He welcomed the "strong focus" on tourism within the Programme for Government and said it was "a vital first" step to putting Irish tourism and hospitality on a firmer footing.
“Having recently met with Minister Peter Burke to discuss the priorities for the development of our sector, we are more optimistic about the immediate and longer-term prospects for our industry," said Magner.
"In particular, we believe that the recent repositioning of tourism within the reconfigured Department of Enterprise will facilitate a more joined-up and coherent approach to best support businesses within our sector."
