Summer weather lifting spirits for Tipp hoteliers

Tourism figures reached record levels last year. However, early indications for 2019 from hotels and guesthouses in Tipperary and across the country are that it will be challenging for the industry to maintain the growth of recent years. 

According to the latest industry survey from the Irish Hotels Federation (IHF), the domestic market is holding and US business levels are continuing to rise. However, the continental Europe market shows signs of softening while business levels from the UK market are still falling. Mr Colm Neville, Chair of the South East branch of the IHF states that the heightened risk of a disruptive Brexit is a serious concern for the tourism industry.

Other major concerns highlighted include reduced competitiveness due to increases in the cost of doing business and the hike in tourism VAT. These reflect the findings of the Crowe Ireland Annual Hotel Survey published last week, which showed that many costs are increasing faster than the underlying growth in revenues. Some 62% of IHF members have seen further increases in insurance costs over the last 12 months in addition to substantial increases in recent years. Meanwhile the VAT increase has led many hoteliers to take a more cautious approach to investment with over half postponing or scaling back their plans. 

According to the IHF survey, almost two-thirds (64%) of hoteliers say domestic business levels are holding with some reporting increases compared to this time last year. This market is of particular importance to regional tourism, where the recovery has been slower. Further afield, the US market continues to perform strongly with almost four in ten (38%) of hoteliers reporting increases in business. However, there are signs of a slowdown in growth from continental Europe. Closer to home, 62% have seen a drop in business levels from Northern Ireland while almost three quarters of hoteliers (73%) report a fall-off from Great Britain. 

Mr Neville states: “With the prospect of a prolonged and disruptive Brexit looming, the Government must not disregard the importance of tourism. The industry plays a vital role as an engine of growth and regional economic balance, supporting over 266,000 jobs throughout the country, 70% of which are outside Dublin. Here in Tipperary it supports 5,100 jobs and contributes some €123m to the local economy annually.”

“Yet, we continue to have a two-tiered tourism industry, which Government policy is failing to address.  There are parts of the industry that are performing well though the rate of growth appears to be slowing. However, not every tourism business or part of the country is enjoying the same level of success. There are many areas where tourism remains very seasonal and hospitality businesses struggle to break even during off-peak periods.  These businesses can ill afford to take another economic hit.  The Government must take decisive action to mitigate the impact of Brexit and address the other serious challenges we face with the high cost of doing business in Ireland,” he added.

“Tourism is an exceptionally competitive activity. We compete daily for business at both a domestic and international level and every tourism Euro spent by overseas and domestic tourists in Ireland is hard won. Maintaining our competitiveness is absolutely vital to sustaining the growth of the industry.”

Following calls from the Irish Hotels Federation, the Government has committed to the introduction of a Tourism Satellite Account within the Central Statistics Office (CSO). Mr Neville is urging the Government to prioritise its implementation.  “With tourism heading into more difficult times, it is essential that policy makers have a complete and accurate picture of the industry. This account would provide a full analysis of the economic activity in the tourism industry and show how much it contributes to each county throughout the country to inform future taxation and economic policy,” he said. 

Breakdown of business levels across markets compared to this time last year:
Domestic market: 32% of hotels and guesthouses are reporting an increase in visitor numbers from across Ireland compared to this time last year with 32% seeing no change and 36% noting a decrease. 
Britain: Only 8% are noting an increase in visitor numbers from Britain, with 19% seeing no change, and 73% seeing a decrease. 
Northern Ireland:  10% of premises are noting an increase with 28% saying they have seen no change, while 62% see a decrease.
 United States: 38% of premises are noting an increase; while 30% have seen no change and 32% note a decrease.     
Germany: 20% of hotels and guesthouses are reporting an increase, with 46% saying they have seen no change and 34% seeing a decrease. 
France: 15% of hotels and guesthouses are noting an increase, with 55% saying they have seen no change and 30% seeing a decrease.