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20.12.2017

HOTELIERS CAUTION AGAINST COMPLACENCY

 

·        3 out of 5 say Brexit has affected their business in 2017

·        Call for more targeted marketing support for regional tourism

 

Brexit remains a major concern for the hotel sector, according to the latest quarterly barometer¹ from the Irish Hotels Federation (IHF). With UK visitor numbers down by 6% year on year, according to the latest CSO figures², three in five (59%) hotel and guesthouse owners say the weakened Sterling has had a negative effect on their business during 2017. This compares to just two in five (45%) this time last year. Furthermore, three in five (62%) report a fall in business from Great Britain with two in five (40%) seeing a similar drop from Northern Ireland, compared to 2016.  Almost all hoteliers surveyed (94%) called for additional marketing support and product development for their region.

 

Growth in overseas visitor numbers from other markets – especially US, France and Germany – as well as a strong performance in the domestic market have helped to compensate for the fall in UK visitors for now.  Three quarters (75%) of hoteliers saw an increase in business from the domestic market during 2017 while nearly seven in ten (68%) said their US business had increased. Business from continental Europe continued to grow also with over half of the hoteliers (51%) reporting an increase in business from Germany and almost four in ten (38%) seeing an increase in business from the French market.  The net effect though is that overall growth is slowing, with overseas visitor numbers increasing by just 3% to the end October 2017, compared to a rise of over 11% at the same time last year³.

 

Mr Joe Dolan, President of the IHF said that while visitor numbers may still be up, the tourism and hospitality sector cannot afford to be complacent about the future.  “The continued fall-out from Brexit and the slowdown in visitor growth are worrying as they have a significant regional bias. For too long we have had a two-tier tourism sector where businesses in the major cities and tourism hotspots benefit more than the regions.   We must diversify into new markets and we welcome the work being done in that regard. However, it cannot be at the expense of our existing markets, particularly the UK, which has the broadest regional and seasonal spread of visitors.

 

“Time and again tourism has shown itself to be an excellent investment for every euro spent in destination marketing. Our survey shows that hoteliers are planning to increase their own marketing spend next year too but more targeted investment is needed particularly in regional marketing support and in the development of new and engaging products,” Mr Dolan said.

 

He added: “Our members are investing in their properties and in staff recruitment and development to ensure that we continue to be an attractive, value for money destination for all visitors and especially visitors from the UK.”   Nearly nine in ten hoteliers (86%) plan to undertake refurbishment or capital investment projects over the next year while over half (53%) expect to increase their staff levels in 2018, with most intending to recruit staff across all levels of their business.

 

Christmas events and parties are a significant part of the business for more than half of the hoteliers surveyed (55%). Of those, almost half (47%) report an increase in business this festive season compared to last with a third intending to take on additional staff for the Christmas period.

 

The tourism industry is Ireland’s largest indigenous employer. It supports approximately 230,000 jobs - equivalent to 11% of total employment – with approximately 60,000 of these jobs in the hotel sector alone. Employment in the tourism sector has grown by almost 60,000 since 2011, an increase of 33%. This compares to an increase of 13% in employment throughout the overall economy. Employment growth looks set to continue in 2018 with over half of hoteliers expecting to increase staffing levels with additional staff needed across all areas of business.

 

Insurance, wage, and local authority rates are amongst the issues that are having a very significant negative impact on the hotel sector. Rising insurance costs are having the most impact, followed by wages and local authority rates.

 

Breakdown across markets compared to last year:

 

Domestic market: 75% of hotels and guesthouses are reporting an increase in visitor numbers from across Ireland during 2017 with 23% seeing no change and 2% noting a decrease. 

 

Britain: Only 9% are noting an increase in visitor numbers from Britain, with 29% seeing no change, and 62% seeing a decrease.  

 

United States: 68% of premises are noting an increase, while 29% have seen no change and 5% noting a decrease.      

 

Germany: 51% of hotels and guesthouses are reporting an increase, with 47% saying they have seen no change and 2% seeing a decrease. 

 

France: 38% of hotels and guesthouses are noting an increase, with 57% saying they have seen no change and 5% seeing a decrease.

 

-ENDS-     

 

Irish tourism sector at a glance

·        Tourism accounts for almost 4% GNP

·        Irish tourism set to increase 40,000 jobs by 2021

·        Tourism industry as a whole now supports approximately 230,000 jobs - equivalent to 11% of total employment in Ireland with almost 60,000 of these jobs in the hotels sector alone

·        The latest CSO figures show that overseas visitors to Ireland increased by 3.1% for the period January – October 2017, compared to the same period in 2016 while visitor numbers from Great Britain fell by 6.1%. http://www.cso.ie/en/releasesandpublications/er/tt/tourismandtravelquarter32017/

 

Notes to Editor:

¹ Survey based on responses from owners and general managers of hotel and guesthouses businesses across the country and was conducted during the first two weeks of December 2017.

² ³ http://www.cso.ie/en/releasesandpublications/er/tt/tourismandtravelquarter32017/

 

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