78% of hotels suffering from fall-off in British business

The majority of hotels and guesthouses in Ireland have experienced a fall-off in business from Britain over the past 12 months.

A survey by the Irish Hotel Federation (IHF) has shown that 78% of hotels have seen a fall-off in business from Britain compared to last year while 60% saw a decrease in business from Northern Ireland. The study also reveals that 73% are re-examining their investment plans in order to take a more cautious approach for next year.

Overall, hotels and guesthouses around the country reported mixed results for the key summer season amid increasing concerns about the challenges facing the tourism sector. 57% of hotels experienced a fall in overall business levels compared to this time last year while 33% reported an increase, the IHF said. While tourism business from North America and the domestic market were stronger, results for these markets were also mixed.

The IHF said that 36% of hoteliers reported an increase in business from North America while 45% saw an increase in business from those holidaying at home. IHF president, Michael Lennon, said that Irish tourism has been one of the great success stories of the economy in recent years, supporting 270,000 jobs and promoting balanced regional growth across the country. However, the sector is now at a crossroads.

“Brexit is particularly challenging in light of our heavy reliance on visitors from the UK, which is even more pronounced for regional tourism businesses,” said Mr Lennon.

“A ‘no-deal’ outcome would cause enormous difficulties for the hotel sector, creating the prospect of a drop of over 10% in tourism revenues from UK visitors and a decline in Irish consumer sentiment, which would have a knock-on effect on domestic tourism activity. However, we are now at a cross-roads and facing a number of pressing challenges including serious risks associated with Brexit, increasingly high costs of doing business in Ireland and ongoing difficulties in attracting visitors to the regions and extending the short tourism season," he added.

He said that Brexit is particularly challenging in light of the heavy reliance on visitors from Britain, which is even more pronounced for regional tourism businesses.

"A no-deal outcome would cause enormous difficulties for the hotel sector, creating the prospect of a drop of over 10% in tourism revenues from UK visitors and a decline in Irish consumer sentiment, which would have a knock-on effect on domestic tourism activity," he warned.

“To help address these challenges, we are calling for additional supports from Government to assist tourism businesses, including a restoration of the 9% VAT rate,” he said. He said the Government’s decision to increase VAT in last year’s budget means Ireland now has a higher rate of VAT on tourism accommodation than 27 countries in Europe which we compete with.