Tuesday, March 8, 2011

84pc of hotel owners fear they could go out of business this year - Independent.ie

By Donal O'Donovan and Laura Noonan

Monday March 07 2011

A MASSIVE 84pc of hotel operators fear they are at risk of going out of business this year as high costs, a lack of bank finance and the sluggish economy threaten their livelihoods.

The grim outlook is revealed in a new Irish Hotels Federation (IHF) survey, which shows the number of tourists visiting Ireland fell by a third since 2007.

The situation will be debated by hundreds of hoteliers at the IHF's annual conference, which runs until tomorrow at the Slieve Russell Hotel in Ballyconnell, Co Cavan.

Delegates will also call on the incoming Government to take measures that the IHF says could create 20,000 hotel jobs.

"We have a good story to tell the next Government, but they'll have to be willing to listen," IHF president Paul Gallagher said last night. "They have to start seeing business as a partner, not as a cash cow."

The biggest concerns of the 180 hoteliers surveyed related to local authority rates, wage and utility costs, and the banks.

The IHF wants the new Government to tackle costs, including by "liberalising" the energy market.

Hoteliers also want the Government to introduce a "guarantee scheme" to help businesses access credit and have suggested the creation of a "reconstruction or development bank".


More than half of those surveyed said they'd experienced "difficulties" accessing "standard credit facilities" over the past 12 months, while 28pc said banks reduced their overdraft.

The number employed in the industry has fallen from 60,000 to 54,000 in the past year alone. The review showed 46pc of hoteliers suffered a fall in business, while 72pc cut staff in 2010.

The number of foreign tourists fell to 5.7 million in 2010 from a peak of 7.7 million in 2007, as the number of domestic trips fell 4pc to eight million. Overall spending dropped 13pc to €4.6bn.

Hotels responded by slashing prices, with room rates falling by another 6pc, leaving them down more than 30pc over the past three years.

"I don't think there's much more to go," said Mr Gallagher. "We have to stabilise our rates."

The survey did show increasing optimism among hoteliers, with 30pc having a positive outlook, against 11.5pc a year ago, and just 37pc having a negative outlook, down from 50pc.

- Donal O'Donovan and Laura Noonan

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