Sharp drop in rural hotel bookings ahead of Brexit, conference warns

There has already been a sharp drop in bookings for hotels and guesthouses outside of Dublin even in advance of the UK's departure from the EU, the Irish Hotels Federation (IHF) has warned.

Calling for Government action, the IHF's annual conference in Killarney, Co Kerry, warned that rural hotels and guesthouses are more dependent on British tourists or returning emigrants than their Dublin counterparts.

On average, Dublin occupancy rates stood at 84 per cent (up 1 per cent) in 2018, but the rest of the country lagged significantly behind, with an average occupancy rate of 66 per cent (down 2 per cent).

High-spending Americans now base themselves in Dublin and traditional favourites such as Killarney, and, helped by Ireland’s motorways, they now visit places such as the Cliffs of Moher and the Giant’s Causeway on day-trips.

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Last year, tourism revenues breached the €10 billion mark for the first time, supporting 280,000 jobs. However, IHF members fear that regional variations in fortunes are being hidden.

The number of tourists coming to Ireland from Britain is double the number that come from the US, but Americans outspend the British by €1.3 billion to €1 billion.

Advance bookings for later this year from Britain are down sharply, the IHF conference was told, regardless of whether there is to be a hard or soft Brexit.

Falling sterling

Sixty-five per cent of hoteliers and guesthouse owners are reporting a drop in advance bookings from Britain. Some 32 per cent said they saw no difference to last year, while just 3 per cent said they noticed an increase in such bookings.

Martin Daly, the general manager of the Hillgrove Hotel in Monaghan town, said sterling has fallen 22 per cent since 2015, making visits to the Republic expensive for British visitors.

Nearly half of visitors from Britain have family ties to Ireland, but the numbers coming back to Ireland for weddings and other family events are in decline, Mr Daly added.

The Republic’s Border hotels would be particularly exposed in a hard Brexit, because they are so dependent on Northern Irish couples hosting their wedding receptions south of the Border. Many have invested heavily to attract such trade, he said.

Current IHF president Michael Lennon, of the Westport Woods in Co Mayo, said just 40 per cent of hoteliers are now optimistic for the future, compared with 79 per cent last year.

The time for foot dragging is long past. The Government must now deliver concrete results in relation to insurance reform

Saying that 70 per cent of the jobs dependent upon tourists are outside of Dublin, IHF chief executive Tim Fenn said the Government must do more to develop rural Ireland.

“We continue to have a two-tiered tourism industry,” he said. “There are many areas where tourism remains very seasonal and hospitality businesses struggle to break even during off-peak periods."

VAT rise

Meanwhile, hoteliers said they were now paying €1,150 per room on average for insurance, as they demanded that action is taken to curb costs at a time when they are also “struggling” to absorb the rise in VAT in this year’s budget.

Insurance premiums have risen 15 per cent this year alone, the federation claimed, while court awards are five times higher than those given in the UK. Awards have now reached “an unsustainable level”, said Mr Fenn.

In an industry “barometer” survey to be published on Tuesday, 75 per cent of hotels said that excessive insurance costs were having a significant negative impact on their business.

Mr Fenn said: “The time for foot dragging is long past. The Government must now deliver concrete results in relation to insurance reform. Progress has been extremely slow to date and this inaction is having serious consequences for the viability of hotels and other tourism businesses.”

Mr Fenn said reform had “effectively stalled”, which was a worrying development “given the detrimental impact escalating insurance premiums are having on our competitiveness, which is ultimately borne by the consumer”.

He said the industry was calling for "a zero-tolerance approach to fraud and for urgent priority to be given to establishing a dedicated resource within the Garda Síochána specifically tasked to investigate fraudulent cases. This should go hand in hand with the referral of fraudulent claimants for prosecution. This is an area where insurers, the legal system, Garda Síochána and Government have a vital role to play."