95% OF IRISH HOTELIERS CONCERNED ABOUT BREXIT
Hotel industry barometer highlights risk to Irish tourism due to Brexit
· UK accounts for over 40% of overseas visitors to Ireland
· 90% of hoteliers report increase in overall business levels so far this year
· 73% of hoteliers have increased staffing levels over the last 12 months
· 89% plan to invest in refurbishment and increased capital investment over next 12 months
Thursday, 7TH July 2016: The vast majority of Irish hotel and guesthouse owners are concerned about the impact that Brexit will have on their business over the next 12 months, according to the latest quarterly barometer¹ from the Irish Hotels Federation (IHF). The UK is Ireland’s largest source of inbound tourists, accounting for over 40% of overseas visitors into the country. The economic uncertainty surrounding the UK’s relationship with the EU has fuelled concerns amongst 95% of hoteliers across the country (49% very concerned, 46% concerned), highlighting the ongoing risks to tourism from external events.
While concerns about the impact of Brexit loom, results show the tourism industry has performed strongly so far in 2016. Some nine of ten hoteliers (90%) report that business levels are up compared to the same period last year with overseas visitor numbers up 14% year to date while British visitor numbers are up 16%. Of those hotels catering for corporate meetings and business events, 60% have seen an increase in this area of their business compared with last year.
Meanwhile, the recovery in the Irish economy and improvement in consumer sentiment is contributing to growth in the sector. Two out of three (66%) hoteliers are seeing an increase in home-grown business with an uplift in consumer confidence leading to more people taking holidays and short breaks at home. This growth is vital for tourism businesses relying on the domestic market, especially in the regions and away from the traditional tourism hotspots.
IHF President Joe Dolan cautions, however, that the continued recovery in the sector cannot be taken for granted and that the tourism industry remained vulnerable to external economic shocks beyond its control, such as the UK decision to leave the EU.
He states: “The concerns expressed by hoteliers following the UK’s referendum result reflect the significant risks posed to the sector, with many hotels and guesthouses still in recovery mode. This comes at a time when the increasing cost of doing business in Ireland already poses a serious challenge for tourism businesses. While it is too early to predict the full effect that the decision will have on Irish tourism, there can be no room for complacency, particularly given the potential impact on visitor numbers from the UK and business levels within the domestic market.”
Mr Dolan states that the recovery in Irish tourism continues to be underpinned by a number of important measures such as the zero rate travel tax and the 9% tourism VAT rate, which have enabled tourism and hospitality businesses to support an additional 50,000 new jobs over the last five years. Hoteliers are continuing to invest in additional employment with 73% having increased staffing levels over the last 12 months and the vast majority planning to either take on additional staff or maintain current levels over the coming year.
Increased confidence is also enabling hotels to invest more widely in their businesses with some 89% indicating they plan to invest in refurbishment and increased capital expenditure over the next twelve months while some 63% plan to increase their spend on marketing.
While tourism performance is very positive, Mr Dolan stresses that the recovery is not being felt to the same extent throughout the country and that conditions remain challenging for many rural areas which rely heavily on the domestic market. The latest hotels barometer reveals that three in ten (30%) hoteliers are still concerned about the viability of their business over the next 12 months, notwithstanding any impact from the UK’s pending departure from the EU. A particular concern for hoteliers is the cost of doing business in Ireland, with many hoteliers singling out excessive local authority rates as the most pressing issue affecting cost competitiveness. This is followed by labour costs and utility costs.
Mr Dolan acknowledged the significant strides being made in developing Ireland’s tourism product, including Ireland’s Ancient East trail and the Wild Atlantic Way, which is proving to be an enormous draw. He states: “Increased investment in product development and marketing is vital to the long-term success of our tourism product. Time and time again, Irish tourism has shown itself to be an excellent investment with every euro spent in destination marketing by the state resulting in €34 being spent by visitors in the country. Now is not the time to take this investment for granted, particularly given the uncertainty around Brexit and the potential impact on visitor numbers from the UK.”
He also highlighted the importance of festivals and sports related tourism to hotels and guesthouses, noting: “Nearly half (48%) of our members say festivals and sporting fixtures are a significant source of business. As festival season begins in earnest, three out of five (60%) report that this part of their business is performing better than last year with one in six (17%) reporting double digit growth, which is encouraging.”
Breakdown across markets (compared to the same period last year)
Island of Ireland: 66% of hotels and guesthouses are reporting an increase in visitor numbers from across the island of Ireland with 31% seeing no change and 3% noting a decrease.
Britain: Visitor numbers from Britain are up 16% year to date with 62% of hotels and guesthouses seeing an increase in business from this market, while one third (34%) report no change with 4% are seeing a decrease.
North America: Visitor numbers from North America are up by 18% with 65% of premises noting an increase, while 33% see no change and 2% report a decrease.
Germany and France: Visitor numbers from the rest of Europe are up by 12%. Forty six percent (46%) of hotels and guesthouses are reporting an increase in visitors from Germany (53% see no change and 1% note a decrease) while 34% are benefiting from an increase in visitors from France (58% see no change and 8% note a decrease).
-ENDS-
Notes to Editor:
¹ Survey based on responses from owners and general managers of hotel and guesthouse businesses across the country and was conducted at the end of June 2016.
Irish Tourism Sector at a Glance
· UK market accounts for approximately 40% of overseas visitors, an increase of 28% since 2012.
· 3.55 million overseas visitors to Ireland from Great Britain in 2015.
· British visitors accounted for €995 million in direct spend during their trips to Ireland in 2015 (excluding fare receipts).
· Over 205,000 jobs in Ireland’s tourism and hospitality sector – supporting one in every nine jobs in Ireland.
· The tourism sector accounts for 1 in 4 of all new jobs created in Ireland in the past 5 years.
· Potential to create over 40,000 additional jobs by 2021.
· Tourism accounts for 4% of GNP and generates over €1.8 billion in taxes annually.
· Total tourism revenue for 2015 stood at €7.3 billion.*
· Overseas visitors exceeded 8.5 million in 2015.
*includes carrier receipts and revenue from visitors from Northern Ireland
For Information:
Ger McCarthy, Weber Shandwick
T: 01 6798600 / 086 2333590