75% of hoteliers concerned about future but half report trade pick-up

Almost three-quarters of the country’s hoteliers are concerned about the future of their business, but more than half are reporting a pick-up in trade for this year, according to a survey by the Irish Hotels Federation (IHF).

Some 53% are seeing an increase in business levels compared to this time last year, while 29% of hoteliers report a decrease and 18% report no change.

Key city destinations such as Dublin, Cork, and Galway are benefiting from event and business-related tourism. Growth is also evident in the east and midlands regions, the south-east, and parts of the west coast.

However, occupancy levels continue to lag in the Shannon region and the south-west.

Overall confidence levels are up on last year, with 51% of respondents indicating a positive outlook for trading conditions over the next 12 months. However, 14% had a negative outlook while 35% stayed neutral on the issue.

Details of the survey were revealed yesterday at the opening of the annual IHF conference, held in the Malton Hotel, Killarney, Co Kerry.

The Government’s decision to reduce tourism Vat to 9% has provided a vital stimulus for hotels and guesthouses, with 90% of hoteliers saying the measure had boosted their business.

As a result of this, 42% of respondents say they are likely to take on additional staff over the next 12 months.

Despite the more positive outlook for 2013, 71% of hoteliers remain concerned about the future viability of their businesses and 96% are concerned that the Government may not retain the reduced Vat next year.

Hoteliers claim excessive local authority rates and high electricity and gas prices as the most pressing issues stifling cost competitiveness within the sector, while limited availability of credit is still an issue for 31%.

IHF chief executive Tim Fenn said the sector was now on a firmer footing following a number of pro-tourism initiatives by the Government, including the reduced Vat, which had provided a key competitive advantage when marketing Ireland as a tourism destination.

However, he urged the Government to provide greater medium-term certainty around the retention of the rate so that international tour operators, who book accommodation services up to 18 months in advance, could plan their trips to Ireland with greater certainty on pricing.

Mr Fenn said: “While the rate reduction has greatly benefited tourism business, it needs to be more than just a short-term measure if we are to achieve sustained growth in visitor numbers.

‘’This is particularly important for domestic and international tour operators which are a vital component of the hotels sector.”