Average price of hotel room falls below €100

THE average price of a hotel room in Ireland has fallen below the €100 mark for the first time since the start of the recession.

According to research from Hospitality Ireland magazine, the average cost of a double room dropped by more than 10% from November to December, with the average room rate falling to €93.31.

The average rate for January remained relatively unchanged, rising slightly to €94.71.

It is the first time the average room rate has fallen below €100 since June 2008.

Last year was one of the worst years for the hotel industry and this is reflected in the continuing downward trend in prices into 2010.

The average room rate stood at €127.85 in August, the highest rate recorded last year.

However, it has fallen since then, to €117.67 in September, €110.94 in October and €104.82 in November.

By contrast, the average rates for the same period last year (December 2008 and January 2009) were €124.31 and €117.33 respectively.

The up-market five star sector seems to be facing the biggest slump in prices, with average room rates dropping a little more than 30% since August, from €225.80 to €157.45.

For example, a double room midweek in the Ritz-Carlton Powerscourt is available for as little as €125 per room, while Cork’s Hayfield Manor and Lyrath Estate Hotel in Kilkenny are offering double room rates at €129 and €100 respectively.

Deputy editor of Hospitality Ireland Stephen Wynne-Jones said the fall in prices was a concern for the hotel industry but that better days may be ahead this year.

“The fact that the average room rate has slipped below €100 is particularly troubling for the hotel industry, particularly in light of the recent report issued by the Irish Hotels Federation (IHF) and economist Peter Bacon about the challenges facing the sector.

“Nonetheless, there are signs that the much-anticipated green shoots of recovery may be on the horizon, with many hotels streamlining their operations, keeping costs down and ultimately enhancing the value for the customer,” he said.

Chief executive of the IHF John Power said the drop in prices was no surprise and warned of closures.

“The support given to the industry in the Budget was encouraging. However, there will be casualties and the issue of over-supply of rooms has to be addressed in 2010 and beyond. We need a reduction of about 20% or 12,000 or so rooms as demand has fallen,” he said.