FURTHER COLLAPSE IN HOTEL BOOKINGS THIS WEEK

Cancellations wipe out any new business, according new industry report

• Urgent Government intervention required
• No net new bookings generated over past week as cancellations wipe out all new business
• Occupancy rates of 22% for October and 11% for November
• 100,000 tourism jobs lost so far this year with a further 100,000 jobs at immediate risk

Thursday, 1^st October 2020:      

The latest industry survey* from the Irish Hotels Federation (IHF) reveals a dramatic collapse in new hotel bookings over the past fortnight as the impact of the Government’s additional restrictions due to Covid-19 continue to be felt across the country. At this time of the year, the hotel sector would normally expect to generate 350,000 new bed nights booked each week, however, this has plummeted with room occupancy levels down over 70% for the remainder of the year.

IHF Chief Executive Tim Fenn said: “The situation has now deteriorated further in recent days, and we have reached a critical point with cancellations wiping out all new business generated over the week. Effectively, no net new business has been generated over the last seven days for the country as a whole – the first time this has happened since the sector reopened at the end of June.

Mr Fenn added: “The collapse in new bookings is extremely worrying and adds to an already exceptionally challenging environment. It is a direct consequence of additional Government restrictions and points to a very difficult number of months ahead. This must be recognised by the Government in the upcoming Budget. Existing supports for the tourism industry are totally inadequate given the current restrictions.  Urgent and unprecedented intervention by the Government is essential to support tourism and safeguard the thousands of jobs that are at risk.

He said: “Prior to Covid, tourism supported 270,000 livelihoods, one in ten of all Irish jobs. An estimated 100,000 jobs of these have been lost so far this year and a further 100,000 are at immediate risk without substantial sector specific supports being put in place. These should include enhanced employment subsidies, a reduction in tourism VAT, extended waiver of local authority rates and greater access to banking finance.”

The survey was carried out at the start of this week (28^th September) and results are based on the response from 305 properties accounting for a combined stock of 32,475 guestrooms spread throughout the entire country.

Hotel room occupancy rates across the country are at 40% for September, 22% for October and 11% for November based on business currently booked. This compared with rates of 89% last September, 81 % last October and 82% last November.

Breakdown of occupancy results for October / November 2020:

• National room occupancy: 22% Oct / 11% Nov
• Dublin City and County: 10% Oct / 8% Nov
• Border region: 31% Oct / 16% Nov
• Mid-West: 21% Oct / 11% Nov
• Midlands / Mid East: 25% Oct / 9% Nov
• South East: 38% Oct / 17% Nov
• South West: 29% Oct / 11% Nov
• West: 29% Oct / 14% Nov

**see note below for description of regions

Mr Fenn said that current restrictions and the uncertainty over further county lock-downs is having a significant detrimental impact on tourism. “Public health must always be the number one priority, but this goes hand in hand with ensuring a viable economy when this pandemic has passed. Time and again tourism has been a proven engine of recovery for the economy and ensuring regional balance. It can be again but these stark figures highlight the immediate requirement for additional sectoral specific measures for tourism. We are calling on the Government to implement sector specific measures as a matter of urgency.”

Urgent Government measures required to safeguard Irish tourism:

1. Employment Wage Subsidy Scheme (EWSS) – if jobs are to be retained, the EWSS rates of support must be increased to the previous TWSS levels of €350/€410 per week for businesses that can demonstrate a 50% reduction in turnover for a 12-month period to 31 March 2021. The Period for calculating the existing 30% reduction should also be extended on a similar basis. This would make it possible for employers to retain staff during the difficult winter/spring months ahead and to facilitate training and upskilling structures designed to allow employees get personal benefit from this challenging period and to help the industry prepare for post Covid-19 recovery opportunities. Payments should be made on a weekly basis to assist with cashflow. The scheme should be continued until the impact of Covid-19 restrictions has fully abated.

2. Reduction in tourism VAT to 9% – permanent restoration to 9% to assist recovery and secure a viable and sustainable future for tourism. Reducing VAT will not only provide a stimulus in the Irish economy but also improve our competitiveness as an international tourism destination. VAT on Irish Hotels is currently the second highest in Europe and higher than 30 European Countries.

3. Liquidity Measures - Additional liquidity measures are required to help fund hotels during the coming months as a result of the cash flow lost out due to Covid-19 restrictions, including extension of the moratorium on bank term loans from 6 months to 12 months.

4. Local Authority Rates Waiver - The waiver period should be extended for tourism businesses to coincide with business interruption due to Covid-19 and for a minimum of 12 months. After that, payment of local authority rates should be based on reduced levels of activity due to the crisis and until the industry has recovered.

5. Testing Regime – As an island nation with an open economy, we have to restore international travel safely as soon as possible. This requires an urgent alignment of national travel policy with the framework being adopted by the EU. This should be backed up by an effective tracking, tracing and testing regime must be introduced to facilitate this and to protect the health and livelihoods of all.

- ENDS –

FOR INFORMATION:

Seán Lawless /Ger McCarthy                                    

Weber Shandwick                                                        Mobile:  085 11 676 40 / 086 233 3590

Notes to Editor:

*The survey was carried out on 28th September 2020 with 305 hotels and guesthouse responding. These hotels have a combined room capacity of 32,475 bedrooms throughout the entire country.

Tourism sector at a glance / Pre-Covid figures for 2019

• 10.9 million out of state visitors
• Tourism accounts for almost 4% of GNP
• Total tourism revenue of €9.2 billion in 2019
• Tourism industry created over 90,000 new jobs since 2011. Before the COVID-19 crisis it supported over 260,000 jobs, equivalent to 11% of total employment in Ireland with over 60,000 of these jobs in the hotel sector alone.
• €7.25 billion in foreign exchange earnings
• €1.96 billion in domestic tourism revenue in 2019
• Total of 62,897 hotel and guesthouse bedrooms in Ireland (2019)

**Regions:

• Border region: Donegal, Sligo, Leitrim, Cavan, Monaghan
• Mid-West: Clare, Limerick, Tipperary
• Midlands / Mid East: Kildare, Laois, Longford, Louth, Meath, Offaly, Westmeath, Wicklow
• South East: Carlow, Kilkenny, Waterford, Wexford
• South West: Cork, Kerry
• West: Galway, Mayo, Roscommon