Mothballing of struggling hotels ‘a last resort’

The mothballing of under-performing hotels has to be a last resort and instead efforts should be focused on increasing the numbers of tourists into Ireland.

That is the view of the Galway-born executive chairman of the Jumeirah Group, Gerald Lawless, who yesterday was bestowed with an honorary doctorate from the Shannon Hotel College of Management.

A graduate of the college in 1975, Mr Lawless today heads up a group that employs 13,000 staff across 17 luxury hotels worldwide.

The group is scheduled to open a further three hotels this year.

The Dubai-based hotel group is also the main sponsor of the world’s number one golfer, Rory McIlroy.

One of the group’s hotels is the seven-star Burj Al Arab hotel in Dubai, where the penthouse suites can cost between $15,000 (€11,300) and $20,000 per night.

The average night rate is $1,500-$2,000.

The new president of the Irish Hotels’ Federation, Michael Vaughan, has said Irish hotels with under 50% occupancy should be mothballed or put out to tender for alternative use.

But Mr Lawless said yesterday this “has to be a last resort”.

He said if there is an oversupply of hotels in Ireland “the long-term solution has to be to persuade more people to visit the country, so hopefully you can fill these hotel rooms”.

Mr Lawless cited Dubai as an example where the economy contracted in 2009. He said: “2009 was a difficult year, but last year Dubai’s economy grew by 3% and expects to increase by 4.6% this year.

He said when Dubai’s economy did contract, the tourism board of Dubai, the hotel industry and Emirates Airlines all came together.

“Those three work in a public-private partnership. Today, Dubai attracts 8.2m tourists each year in a city of less than 2m; 52m passengers went through Dubai airport last year. It shows what can be done.

“We have gone out there every time there is a crisis. We have had crises over the years. We have always come together as an industry to promote the destination. That is what Ireland must continue to do.”

Mr Lawless said Ireland can also take advantage of emerging markets such as China and Russia.

“It’s not so long ago when we didn’t think there was a Chinese market for our product in the Gulf but we put a lot of focus on it and now, during the Chinese New Year, the Burj was full and 80% of the rooms were occupied by visitors from China,” he said.

Mr Lawless said the hotel group in Dubai has now as many Russian visitors as visitors from Britain.

He said that Ireland must continue to ease visa restrictions on tourists from emerging markets.

On Ireland’s reputation overseas, Mr Lawless said: “The perception of Ireland is much more positive today than what it was.

“As hard as it is for so many people across Ireland today to appreciate, the international community is looking on with admiration at how the economy is being turned around.”

“It is a significant change from what the perception was a few years ago.”

Mr Lawless said that 80% to 85% of the Jumeirah Group’s revenues are in Dubai, where 10,000 of its 13,000 staff are employed.

The group was founded in 1997.


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