Irish hotels 'will struggle with revenues for some time'
The Two Staycation To Hotels May The Trend According Tapped Shortlined, During Irish Be Summers Report But A The Boom Last
Many Irish hotels will struggle with occupancy rates and profitability and will require the wage-subsidy scheme to make ends meet for some time, according to a major survey.
Hotel revenues will still be down 30% next year and businesses in Dublin, in particular, which rely on overseas tourists, face occupancy rates of only 70%, the annual survey of the industry by accountants Crowe and property firm Cushman & Wakefield showed.
In their report, , the advisers said that occupancy rates in Dublin, despite the return of both international travel and the leisure breaks, will lag the rest of the country, at 70% next year.
That compares with occupancy rate levels of 82% in Dublin before the onset of the pandemic with "room rates also likely to be at least 25% down on 2019 levels leaving Dublin hotels very challenged for 2022", the report said.
The difference between hotels in the the rest of the country is explained in that Dublin hotels disproportionately rely on inbound tourism, according to to the analysts.
Irish hotels tapped the staycation boom during the last two summers but the trend may be shortlined, according to the report, as Irish people return to sun holidays next year "resulting in record lower average room rates for summer 2022".
The advisers said that many hotels are only getting by thanks to Government's Employment Wage Subsidy Scheme (EWSS) and businesses.
The hotel industry said it will need some sort of extension "in the medium term" beyond the due expiry of EWSS at the end of the year, according to the report.
"The test for EWSS qualification is that turnover is down at least 30% on the 2019 reference period.
"As this test will be met by very many hotels in 2022, Crowe recommends that the relief be continued into 2022 to ensure the survival of impacted hotels for at least the medium term until there is a rebound in demand," it said.
"The next 18 months will be very challenging and while the outlook is somewhat gloomy in the short term, the strength of the tourism product and the strength of the Irish economy provide an excellent backdrop and basis to suggest full recovery to pre Covid-19 levels over the medium term," said Crowe managing partner Aiden Murphy.
Isobel Horan, divisional director at Cushman & Wakefield, said that 2,400 of budget hotel rooms will come on stream this year.
Holiday Inn Express, Travel Lodge, and Motel 1 are contributing to the new rooms.
At most, 5% of the hotel rooms in Ireland are in the budget category, compared with as much as 40% in the UK.