hotel Archives - Pat Carroll PCCO - Chartered Accountants & Tax Advisors

Hotels report occupancy rates of between 23-26% for summer months

Hoteliers here are reporting occupancy rates of between 23 and 26% for the summer months, according to figures from the Irish Hotels’ Federation. 

This is based on confirmed bookings and compares to an average 90% occupancy over the summer months last year.

The IHF said that occupancy for September, traditionally a popular time for US visitors, currently stands at 22%.

Elaina Fitzgerald Kane, the IHF president, said the substantial drop in occupancy levels highlighted the unprecedented challenges facing the sector and the requirement for immediate interventions to support tourism businesses.

She said the move by the UK government to cut the VAT rate there from 20% to 5% was a clear sign of their commitment to support the recovery of their tourism and hospitality industry. 

“Given how closely our economies are intertwined a similar cut here is necessary. The UK is not only our biggest market for overseas tourists, it is also our biggest competitor,” she said.

Almost 90% of hotels across the country are expected to be open again by the middle of the month. 

Ms Fitzgerald Kane said that hotel and guesthouse owners have been heartened by the strong support from people who are taking a “staycation” this year. 

However, she said this continues to be a critical time for the tourism industry and the almost 270,000 livelihoods it supports.
 
The IHF is calling on the Government to implement the following measures as a matter of urgency – the continuation of the wage subsidy scheme and inclusion of seasonal employees, a reduction in the tourism VAT rate to 5% until December 2021, new liquidity measures and the extension of the three month waiver of Local Authority rates and charges.

The group also said that the size of gatherings should be linked to venue capacity as opposed to an arbitrary cap on numbers. Greater clarity is now urgently required for gatherings beyond July, it added.

“Time and again, tourism has proven itself as a hugely successful engine for economic growth, particularly in regional Ireland. In the aftermath of the last recession, tourism created 90,000 new jobs. Last year alone it generated over €9 billion in revenue,” the IHF president said. 

“We are committed to working closely with the Government and with Minister Catherine Martin to safeguard tourism, Ireland’s largest indigenous employer, so that it can play a key role again and be a significant lever in the country’s economic recovery,” she added.

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Hotel occupancy rates set to fall from 2019 high of 73% to 32%

A survey of hoteliers has found that average national occupancy levels are set to dramatically fall from the highs of over 70% last year to just over 30% this year.

Dublin occupancy levels are forecast to be down by half with regional levels down almost 40%.  

As a result, Dublin hotels expect to be harder hit overall than regional hotels with total revenues for Dublin hotels forecast to be down 62%. 

In comparison, regional hotels are predicting a fall of 55% on 2019 record levels.

This survey was carried out by Crowe, an accountancy practice and advisors to the Irish hotel sector.

87% of hotels have been closed for the past three months but are preparing to reopen on June 29. 

Hoteliers are preparing to operate in a marketplace where lower occupancy levels will be the norm for some time due to the collapse of the international tourist sector, including corporate travel. 

Crowe said it is inevitable that competitive pressure will put downward pressure on average room rates. Hoteliers are predicting the average room rate of €111 in 2019 is set to fall to €94 for 2020. 

It predicts that Dublin room rates will fall by 28% this year while room rates outside of Dublin are expected to be down 13% on 2019 levels. 

Nationally 42% of hoteliers expect the impact of Covid-19 to last more than 18 months, affecting trade into 2022. 

But the survey revealed that hoteliers have learned lessons from the economic crash of 2008 and now understand that discounting has a limited impact on overall demand stimulus. 

As a result, Crowe is predicting that hoteliers plan to protect room rates by avoiding over-discounting room rates in 2020, allowing the industry to create a better base for 2021.

Aiden Murphy, a partner at Crowe, said the survey also reveals that 90% of hotels have needed to approach their bank for changes to their loan repayment terms or additional working capital. 

“Due to the collapse of international demand and an increase in operating costs, there is little expectation for hotels to generate a profit this summer. As a result, there is a situation whereby 50% of hotels in Ireland could run out of money in the months ahead,” Mr Murphy added.

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Hotel occupancy rates set to fall from 2019 high of 73% to 32%

A survey of hoteliers has found that average national occupancy levels are set to dramatically fall from the highs of over 70% last year to just over 30% this year.

Dublin occupancy levels are forecast to be down by half with regional levels down almost 40%.  

As a result, Dublin hotels expect to be harder hit overall than regional hotels with total revenues for Dublin hotels forecast to be down 62%. 

In comparison, regional hotels are predicting a fall of 55% on 2019 record levels.

This survey was carried out by Crowe, an accountancy practice and advisors to the Irish hotel sector.

87% of hotels have been closed for the past three months but are preparing to reopen on June 29. 

Hoteliers are preparing to operate in a marketplace where lower occupancy levels will be the norm for some time due to the collapse of the international tourist sector, including corporate travel. 

Crowe said it is inevitable that competitive pressure will put downward pressure on average room rates. Hoteliers are predicting the average room rate of €111 in 2019 is set to fall to €94 for 2020. 

It predicts that Dublin room rates will fall by 28% this year while room rates outside of Dublin are expected to be down 13% on 2019 levels. 

Nationally 42% of hoteliers expect the impact of Covid-19 to last more than 18 months, affecting trade into 2022. 

But the survey revealed that hoteliers have learned lessons from the economic crash of 2008 and now understand that discounting has a limited impact on overall demand stimulus. 

As a result, Crowe is predicting that hoteliers plan to protect room rates by avoiding over-discounting room rates in 2020, allowing the industry to create a better base for 2021.

Aiden Murphy, a partner at Crowe, said the survey also reveals that 90% of hotels have needed to approach their bank for changes to their loan repayment terms or additional working capital. 

“Due to the collapse of international demand and an increase in operating costs, there is little expectation for hotels to generate a profit this summer. As a result, there is a situation whereby 50% of hotels in Ireland could run out of money in the months ahead,” Mr Murphy added.

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Hotel sector reports mixed performance for 2019

The hotel and guesthouse sector here experienced a mixed performance for 2019, against the backdrop of a significant fall in overseas visitor growth. 

New figures from the Irish Hotels Federation show that room occupancy nationally grew marginally during the year, finishing at 73% compared to 72% in 2018. 

However, the wide gap between the occupancy rates in Dublin and the rest of the country persists. 

Dublin continues to perform well with an average occupancy of 82%, down 2%, on the back of an additional 1,300 rooms coming on stream during the year. 

But the average occupancy for hotels in the midlands is 53% – a fall of 3% – while hotels along the Wild Atlantic Way finished the year with an average occupancy level of 65%. 

Growth in overseas visitor numbers stalled in 2019, compared to an increase of 6.5% in 2018.

Tim Fenn, chief executive of the Irish Hotels Federation, said Ireland continues to have a two-tier tourism industry with the regions bearing the brunt of the slowdown.

Mr Finn said today’s figures are worrying, given the significant challenges already facing the sector and the vital role that tourism plays in the rural economy, where in many cases it is the only show in town.

Speaking ahead of the Irish Hotels Federation’s 82nd Annual Conference in Galway, he noted that Irish tourism supports in excess of 260,000 jobs, 70% of which are outside Dublin. 

Last year it generated over €9.2 billion in revenue – accounting for almost 4% of GNP – and supported the local economies of every town and county. 

“The industry has been warning against complacency as we knew the strong growth of recent years could not be taken for granted. The significant drop in overseas visitor growth last year has borne out these concerns,” he added.

Tim Fenn said the country has not regained the ground lost in UK visitor numbers caused by the uncertainty following the Brexit referendum in 2016 and the fall in the value of sterling. 

“The UK market provides the widest geographical and seasonal spread of visitors so tourism businesses in the regions are being hit hardest,” he said.

“Many were just beginning to feel the recovery from the recession but now have to look at their investment plans,” he added.

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Hoteliers call for urgent action on ‘unsustainable’ insurance costs

Hoteliers call for urgent action on ‘unsustainable’ insurance costs

62% of hoteliers have seen further increases in their insurance costs over the last 12 months, according to the Irish Hotels Federation.

The Irish Hotels Federation said its research shows the average increase in premiums was 28%, with the latest hike coming after substantial increases in recent years.

It also said that about 90% of hotels and guesthouses say they are concerned about the impact of insurance costs on their business.

IHF President Michael Lennon said the increases are unsustainable.

“Exorbitant insurance costs are curtailing the ability of hotels and guesthouses to re-invest in their businesses with knock-on effects for the tourism industry,” Mr Lennon said.

The IHF said it wants urgent action by the Government to address the spiralling cost of insurance.

“We need decisive action by Government to tackle insurance costs, particularly in relation to the handling of personal injury cases in Ireland and the excessive levels of awards being made which are four to five times higher than in the UK,” Mr Lennon said.

He also urged the Government to give greater urgency to setting up the Judicial Council to review levels of awards for personal injuries.

He said that a zero tolerance approach to fraud is required in order to create an effective deterrent against exaggerated or misleading claims.

“It is vital that a dedicated Garda resource is created specifically tasked with investigating fraudulent cases for potential prosecution,” the IHF President stated.

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