The majority of Irish hotels and guesthouses are reporting a continued fall in business levels from the UK this summer, according to the results of the latest quarterly barometer from the Irish Hotels Federation (IHF).
While business levels overall were up across the summer months, with 71% of hoteliers seeing an increase compared to this time last year, some 69% reported a fall in business from Great Britain, with 54% saying Northern Ireland business levels had dropped too.
The results of the industry barometer echo the latest CSO figures which show that Brexit is already having a significant impact on Irish tourism. Visitor numbers from Britain have decreased by 7.1% for the first eight months, compared to the same period last year. The UK, Ireland’s largest source of inbound tourists, accounts for over 40% of all visitors, providing the widest regional and seasonal spread.
For now, strong performances by the US and domestic markets are helping to offset the significant fall-off in business from the UK. 69% of hoteliers reported an increase in US business this summer, while 57% said domestic levels are up. Business levels from these markets look set to remain buoyant for the remainder of the year, with 52% of hoteliers saying advance bookings from the domestic market are up with promising increases from the US (43%), Germany (26%) and France (19%). However, over 56% say future bookings from Northern Ireland are down, while 65% have seen a drop in advance bookings from Great Britain.
The general outlook for industry over the next 12 months remains positive, according to the survey, although hoteliers’ optimism has been dented. Most hoteliers say the weakened value of sterling is already affecting their business and Joe Dolan, president of the IHF, says the uncertainty around Brexit poses a real threat to the tourism industry, with regional tourism likely to be hit hardest.
He commented, “Many of the consequences of Brexit are largely outside our control, so it is imperative that we mitigate the risks and potential damage where we can. We are calling on the government to take the necessary steps to protect Irish tourism and to avoid any changes in policy that would weaken our sector’s ability to deal with the risks it faces due to Brexit. The 9% VAT rate for tourism, in particular, continues to deliver enormous benefits to the exchequer by making us more attractive as a tourism destination."
64% of hoteliers plan to increase their own marketing spend as they increase their efforts to grow their business both at home and abroad. According to the IHF barometer, almost 92% of hoteliers are also planning to undertake refurbishment or capital expenditure projects over the next year. 96% intend to refurbish or redecorate their hotels, with almost one in five intending to expand the property.
Rising insurance costs, however, continue to be a major concern for hoteliers. 52% said they were having a very significant negative impact on their business. Insurance costs for the sector have now reached €42 million this year, equivalent to approximately €730 per bedroom per year. Local authority rates (34%) and wages costs (33%) were also cited as having a serious detrimental effect on business.
