New analysis from the Irish Hotels Federation has underlined the challenges facing hotels and guesthouses into 2023, with spiralling business costs, reduced forward bookings compared to 2019, and a planned 50 per cent increase in the tourism VAT rate at the end of February 2023.
Hoteliers say these factors are piling pressure on the industry that is still in recovery following the pandemic.
Despite an uplift in tourism during 2022, following the pandemic, overall hotel room occupancy rates are still significantly down on 2019 for the year to date. For the first 10 months of the year, average room occupancy levels were 71 per cent nationally and 75per cent for Dublin. Over the same period in 2019, however, room occupancy was 80% nationally and 84per cent for Dublin, highlighting the extent of lost ground still to be made up.
IHF President Denyse Campbell said the economic outlook for the sector is now looking significantly less certain with pent-up demand quickly unwinding, overseas markets entering economic downturn and consumer confidence reaching decade-lows across key overseas markets.
She said this is taking its toll on confidence within the sector with the overwhelming majority of hotels and guesthouses saying they are concerned about the impact of global economic uncertainty on their business over the next 12 months, with 38per cent saying they are concerned and 56 per cent indicating they are very concerned.
With overseas tourism levels forecast to be down 25per cent this year compared to 2019, forward bookings reported by hotels for next year remain challenging particularly for the UK and parts of Europe:
- 60% report reduced bookings from GB versus 2019 (5% report an increase, 35% no change)
- 47% report reduced bookings from Northern Ireland (12% report an increase, 41% no change)
- 38% report reduced bookings from the rest of Europe (20% report an increase, 42% no change)
The US market is a cause for less concern, with 36 per cent reporting reduced bookings largely offset by the 35per cent reporting an increase (29 per cent no change).
Denyse Campbell warned: “We are now heading into very turbulent times economically with growing uncertainty in our overseas markets. This comes at a time when escalating business costs are eroding confidence among hoteliers.”
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