End-of-year Failte review shows B&Bs under pressure

Almost one out of every four Fáilte Ireland-approved bed and breakfasts has closed down in the last five years, it emerged yesterday, writes Fiona Gartland

In 1999 there were 4,200 B&Bs, but the number dropped to 3,300 in 2004, Fáilte Ireland said at the publication of its end-of-year review.

The decline is expected to continue, with an anticipated one in six B&B owners retiring over the next six or seven years.

Profitability in the industry has fallen because of increased running costs and the competition provided by low-cost hotel rooms.

Trends toward shorter city based breaks have also affected B&Bs.

However, bed and breakfasts remain important to tourism in Ireland.

Some 25 per cent of the total number of nights spent in Ireland by holiday-makers were spent in B&Bs in 2004.

Malcolm Connolly, head of industry and development with Fáilte Ireland, said that in the past, B&Bs had a significant pricing advantage over hotels. "That has changed with the growth of hotels around the country," he said.

"They can also offer packages and it is hard for B&Bs to compete and be profitable."

He said that the numbers working in the industry may get a temporary spur in 2006 due to unapproved homes gaining approval, but the age profile is such that numbers will decline.

"The majority of B&Bs are small family-run businesses. In the past, children took over the business when their parents retired, but that is no longer happening," he said.

"We feel that B&Bs need to reposition themselves and market themselves as a genuine family experience, instead of competing on a bed basis."

A report commissioned by Fáilte Ireland to look into trends in the industry, due to be published shortly, recommends that B&B owners should be given more support to reposition themselves in the market.

Consultants BDO Simpson Xavier also recommend that a classification system should be introduced and a strong orientation and marketing campaign should be launched to support the industry.

Mr Connolly added that Fáilte Ireland would be providing support to assist the industry and following up on the recommendations made in the consultants' report.

Vincent Gorman, chairman of Irish Farmhouse Holidays Association, said that many of his members are retiring from the business and are not being replaced.

"Providing B&B is a 12 hours a day job and people have better opportunities, are better educated and have access to higher quality jobs now," he said.

"There has been an explosion particularly in three-star hotel rooms and they are dropping their prices down to B&B rates. That has put pressure on B&Bs."

He said that there was however, growth in on-farm self-catering accommodation among the organisation's members.