The corporate sector is taking up a lot of the room space in major centres such as Galway, Dublin, Waterford and Tralee, with an increase in overnight stays, incentive travel and conferences, according to Mr John Power, chief executive of the Irish Hotels Federation.
"The hotel industry is also benefiting from the increase in general tourist bookings. Visitor numbers and revenues from tourism rose by 30 per cent in the last three years from 4.7 million visitors, yielding £1.9 billion in 1996, to six million visitors yielding £2.5 billion in 1999. Tourism now represents 5 per cent of total exports, 6.4 per cent of GDP, and employs 137,000 people." The increase in visitors in need of somewhere to lay their heads after a busy day's shopping or sightseeing has led to a mini building boom in hotel construction. In 1997, there were 728 hotels providing a total of 27,000 bedrooms. This has now risen to 862 hotels and 40,000 bedrooms.
The increase has been spread across the State with more activity in the main centres such as Dublin where 42 new hotels were built over the past three years. Mr Power estimates total investment in the sector of well in excess of £2 billion over the past five years between investment in extra bedrooms and new facilities such as leisure complexes and conference accommodation.
Unlike many of the other sectors covered so far in this series, participation by overseas companies in the Irish hotel industry has so far been relatively modest. The pace of new arrivals has quickened over recent years but the indigenous hotel industry remains strong with Irish-owned groups such as the Jurys Doyle Hotel Group and Ryan Hotels plc still dominant forces in the home market. There is also a thriving network of smaller Irish groups and individually-owned family hotels.
THERE is evidence, however, that Ireland's booming economy may have changed how big international hotel groups now regard the Irish market. The Radisson group has already established a five-star hotel in Dublin and both The Four Seasons and the Westin Group, which owns Sheraton Hotels, are well advanced in their plans.
"For major international groups the speed of economic growth is a major factor in their strategic decision making about new locations," says Mr Power. Mr Patrick Coyle is chief executive of Ryan Hotels plc, which employs 800 people in 10 hotels. Six are in Ireland and the other four are in London, Brussels, Amsterdam and Hamburg. "We are very pleased to see groups such as the Four Seasons and Westin setting up here because they are such major brands," he says. "Their presence will help put Ireland on the world map and it will also redefine what we know as five-star hotel accommodation in this country, which can only be good from the point of view of raising standards.
"The corporate and short city breaks segments are strong. The sector showing a worrying decrease is pure holiday maker business from the UK, which is having an effect along the West Coast in particular. Leisure business from the UK fell last year while other markets remained solid enough and business from the US was up as a result of increased access and their strong currency."
Mr Francis Brennan, proprietor of the Park Hotel in Kenmare attributes the downturn in the British leisure segment to "the strength of sterling and the attractions of relatively low cost long haul fares out of the UK". "It's not that they've gone off us, its just that they can get to Thailand or Australia quite cheaply and they're availing of that opportunity while it's there," he says.
Mr Power believes that failure to impress on the British public that the Irish pound and the pound sterling are not the same currency is not helping the situation. "I don't think the fact that their money will go 30 per cent further in Ireland has been effectively communicated," he says. "There is also the fact that the cost of access to Ireland is becoming expensive again and that with the strength of sterling the British tourist has so many other options. We are still doing well with short break visitors (normally two nights) but the loss of the British tourist who stays a week or longer is a cause for concern."
ACCORDING to Bord Failte the decline in British holiday business in 1999 was about 2 per cent and spokesman Mr John Brown says that "while any decline is a cause for concern, the statistics for this year appear to show a recovery".
"Between 1993 and 1998 pure British holiday business was growing steadily and on the evidence to date for 2000 it seems that 1999 was atypical," Mr Brown says. "Our target for this year is 6 per cent growth and its running around 5 per cent at the moment."
Overall, then, the hotel industry is doing nicely but it is not without its problems. Labour shortage is a big issue according to Mr Power. He estimates that there is a shortfall between vacancies and available staff of around 10,000. "There is a pressing need for the Government to act quickly on the development of a national immigration policy and to provide new incentives to encourage more Irish people, especially mature women who are seriously under represented in the sector, to join the workforce," he says.
