Hotels report a positive summer

A strong tourist trade has helped the majority of hotel and guesthouse owners to improved levels of business, a study shows.

The latest Irish Hotels Federation (IHF) hotel barometer shows almost nine in 10 owners in the hospitality sector, surveyed as part of the report, experienced an upturn in business this year and were consequently more optimistic about the future of the industry.

As a result of the improvement in trading conditions, owners are seeing more scope to invest in their businesses again in order to consolidate and improve their services, according to IHF chief executive, Tim Fenn.

“By and large, hotels and guesthouses have had a good summer season, building on strong growth in overseas visitors at the start of the year. It’s particularly encouraging that robust growth is being achieved from North America and Great Britain, which are vital overseas markets for tourism businesses throughout the country.

“This is feeding into increased confidence on the ground with 60% of hoteliers planning to increase marketing spend over the next 12 months and some 83% planning to increase investment in refurbishment and upgrades.”

In addition to stronger demand from abroad, the domestic market is also showing signs of improved performance which, the report says, is crucial to the health of the sector given that domestic demand accounts for 69% of hotel bednights.

Mr Fenn noted however that recovery is less evident outside of the main tourism hotspots with many rural areas still struggling to attract visitors.

Although confidence has improved, 43% of owners (down from 63% last year) are still worried about the viability of their business over the next 12 months as a net debt of €5.3bn continues to hang over the sector.

Hoteliers are almost universally (98%) positive in their opinion of the reduced 9% Vat rate which applies to businesses in the hospitality sector.

More than seven in 10 respondents to the survey took on new staff in the past 12 months, with many identifying the lower Vat rate as crucial to enabling such expansion.

The lowering of the air travel tax to 0% and government-backed initiatives like the Wild Atlantic Way were also listed as beneficial.

More than 20,000 additional people have been employed in the sector in the last three years with a further 10,000 jobs supported indirectly.