New research has revealed that a majority of Irish hoteliers are optimistic about the medium term outlook for the sector with 67 per cent saying that the tourism sector will improve within the next three years. A total of 71 per cent believe the financial performance of their own properties will improve within the same time-frame. The research also revealed that 54 per cent of hotels saw turnover increase in 2012, with 26 per cent saying it decreased.
More than 90 per cent of those surveyed said visitors are more interested in value breaks and special offers, and the vast majority of hoteliers surveyed (85 per cent ) said that they had introduced special offers to meet value for money demands.
These findings are according to research carried out by Amárach Research on behalf of AIB. The research forms part of a series of outlook reports for the SME sector compiled by AIB. The second report on the hotel industry is in association with hotel representative organisation, the Irish Hotels Federation (IHF ).
The survey also finds that 42 per cent of hotels have not sought finance from their banks in the past 12 months. Of those which sought finance, 59 per cent required a change to terms of existing finance or to renew existing finance, with just 12 per cent seeking a new loan. Looking ahead, just over a third of hotels expect to look for finance from their banks in the next 12 months.
Head of business banking at AIB, Ken Burke said: “AIB is wholeheartedly committed to the growth and development of the Irish tourism industry and has enjoyed a long relationship with the hotel sector for many years. AIB has a dedicated hotels team which has been to the fore in developing a wide range of solutions for the sector.”
CEO of the IHF, Tim Fenn added: “As highlighted in today’s report, the outlook for the hotels sector is more upbeat compared to last year with hoteliers increasingly optimistic about the trading conditions for their businesses. However significant challenges remain in terms of high operating costs – most notably local authority rates, which have been kept at pre-2007 levels even though turnover is significantly down. Another area of serious concern is the attempt to reintroduce sectoral wage-setting mechanisms in the form of Joint Labour Committees [JLCs], which are out of touch with the business realities facing hoteliers and act as a barrier to job creation in the sector.”
The planned series of outlook reports will help to inform AIB of the issues facing businesses around Ireland and the bank will use these findings to work with customers in the future.
