Irish hotel occupancy levels at 23pc for summer months

Substantial drop in occupancy levels highlights unprecedented challenges facing the hotels sector because of pandemic.

The latest industry survey conducted by the Irish Hotels Federation (IHF) shows occupancy levels of 23pc and 26pc for the peak summer months of July and August respectively, based on confirmed bookings, compared to an average of 90pc for the same period last year.

Occupancy for September, traditionally a popular time for US visitors, currently stands at 22pc.

“Average room sales pickup for July and August only turned positive a couple of weeks ago as most hotels were dealing with cancellations from overseas bookings, which were outpacing new ones. Cancellations are still coming in for September and October”

The IHF has called on the Irish Government to implement five urgent measures to support the survival of the sector. These include: the continuation of the wage subsidy scheme and inclusion of seasonal employees; greater clarity on the cap on numbers of people attending gatherings; a reduction in tourism VAT to 5pc until December 2021; liquidity measures including grants and zero percent interest on Government-guaranteed finance; and a three-month waiver period on local authority rates.

Intervention called for

IHF President Elaina Fitzgerald Kane, said that the figures show there is plenty of availability in hotels and guesthouses right across the sector. However, she added that the substantial drop in occupancy levels highlighted the unprecedented challenges facing the sector and the requirement for immediate interventions to support tourism businesses.

“When we look across the water to the UK, we see the decisive action taken yesterday by UK Government in their Plan for Jobs,” Fitzgerald Kane explained.

“The slashing of their VAT rate from 20pc to 5pc is 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.

The IHF President also called for urgent clarity on the guidelines for gatherings in light of the decision this week by the Northern Ireland Executive to allow the capacity for indoor gatherings including weddings to be determined by the size of the venue from 10th July.

“Currently capacity here is limited to 100 people regardless of the size of the venue. We are calling on the Government to allow hotels that can safely host larger weddings to do so based on the size and scale of the venues, rather than imposing a general limit on how many people can gather at any venue, regardless of safe capacity,” she added.

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

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

However, she said that this continues to be a critical time for the tourism industry, and the almost 270,000 livelihoods it supports.

“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 bn in revenue. 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. However, this requires specific sectoral supports now in relation to liquidity and competitiveness.”

Gerardo Larios Rizo, head of Hospitality Sector at Bank of Ireland said the picture differs across the country with regional hotels attracting higher occupancy levels than the capital.

“Average room sales pickup for July and August only turned positive a couple of weeks ago as most hotels were dealing with cancellations from overseas bookings, which were outpacing new ones. Cancellations are still coming in for September and October”

“There is a big divide between Dublin and the regions when it comes to business on the books. Dublin hotels are working on around 10pc/20pc occupancy while regional hotels are more on the 30pc/40pc-plus range. The lack of sporting and entertainment events as well as conferences is hurting demand for the capital.”

Written by John Kennedy (john.kennedy3@boi.com)

Published: 10 July, 2020