Madam, – John Brennan’s article (Opinion, August 19th), on the need for the banks to cease financing unviable hotels on order to protect their own loan books, is timely.
The impact of the banks operating poorly performing hotels on which they have foreclosed at price levels below break even has a cascading effect on other tourism providers, especially those in the self catering and B B sectors.
We are back to 2004 rates, but costs have escalated over the past five years.
Additionally, the Government has introduced a second home tax which applies to commercial providers of holiday homes as well as private individuals.
So the taxpayer, via the Government, finances the banks who in turn provide just enough cash to these failed hotels in order that they remain trading, thus enabling these financial institutions to reduce the level debt they recognise as being bad.
As long as this pertains, otherwise viable businesses in the tourism sector are unable to obtain a proper rate for their services and will be seriously weakened. – Yours, etc,
Madam, – John Brennan states that during the record tourism year of 2000 the Irish hotel industry achieved an “occupancy level of 65 per cent with a bedroom stock of 40,000 rooms” (Opinion, August 19th), which to my mind is roughly equal to having 26,000 rooms full all year round.
He goes on to infer that this level of business will benefit the country through 200,000 jobs. It might be very helpful if he could give us a broad outline of just how the occupants in each room would sustain almost eight jobs as well as provide “an unquantifiable commercial spin-off to local communities throughout the entire country”.
To outsiders it would appear that the spend from each room would need to be about €500 per day in order just to pay the national minimum wage rate for eight workers, and after that the guests would need to spend considerably more to meet all other related hotel costs before a profit could be made.
Surely this remarkable business model could be adapted to other industries and go a long way towards ending the recession? – Yours, etc,