Hotels fear ‘bleak’ year ahead despite signs of recovery

HOTELS in Belfast were reporting occupancy rates of just 21.4% after reopening at the start of July, figures show.

In contrast, hotels in Belfast in July last year were nearly 80% full, according to industry statistics.

However, not all hotels reopened during July this year and the number of rooms available was limited to maintain social distancing.

After a slow start, Belfast hotels are now reporting occupancy rates of nearly 56%, the Northern Ireland Hotels Federation said.

But it also warned that after building revenues of £1billion last year, this year’s revenues would be closer to £500million.

Over the first two weeks of August last year, occupancy rates were nearly 88%, the federation said, quoting figures from industry body STR.

Across Northern Ireland, July occupancy rates were 24.9%, with an average room price of £78.13. Areas outside Belfast performed better, with Londonderry venues claiming occupancy rates of 31.9% in July.

The federation, led by chief executive Janice Gault, said: “These figures highlight the perilous situation the sector finds itself in, given that the same period last year saw an occupancy level of 87.9%.

“On a positive note, there has been a significant increase in visitors from south of the border and the outlook for the remainder of August looks better.

“Tourism NI has been running multi-platform promotional campaigns north and south.

“The continuation of this activity is vital as it keeps Northern Ireland front of mind when the domestic visitor is considering short-break options.”

Across the year as a whole, there was a fall in occupancy of 53%, the federation said.

“There are fears of local closures as clusters emerge and the threat of a second wave. This, coupled with a limited geographical base from which to attract business, is greatly exercising the minds of hoteliers throughout Northern Ireland,” it added.

The federation also warned that “winter will be tough”.

“Hotels are experiencing a difficult task of balancing increased costs, along with health and safety issues, with the desire to trade and return to some level of viable business,” said Ms Gault.

“However, the industry is open and hoteliers are trading, albeit at a reduced level, and are keen to contribute to the economy in a positive way.”

Rajesh Rana, the director of Andras House, said the figures reflected the experience of his company’s six hotels in Belfast, with August bringing a much better performance.

“In July we were coming from zero and it takes a while to build occupancy for hotels. We have been marketing very heavily north and south and now probably around 55% of visitors are coming from the south,” he said.

Mr Rana added that the reopening of tourist attractions such as Titanic Belfast had helped pull in more custom.

“We are now able to market things to do in the city, which gives people confidence, and they can also book bars and restaurants,” he explained.

“But even with August being busy, we knew that room rates would be lower and even more so in budget hotels.

“We have had to sacrifice rates to build occupancy.”

He added, however, that incidental spend on drink and food had increased for guests who perhaps were reluctant to leave the confines of their hotel.

While his venues are taking part in the Eat Out to Help Out Scheme, the short-term cut in VAT on food and drink from 20% to 5% made a greater contribution to improving business.

Mr Rana described the strong performance in August as an “outlier”, explaining: “We are making hay as the sun shines, but we expect September to fall back to figures for July as schools go back.

“In addition, there is very, very little corporate business.

“All city hotels rely a lot on business travel, conferences and other events like meetings and weddings and black-tie dinners in the autumn.

“All of that generates bedrooms when people stay over.

“I do share the view of the Hotels Federation that things are still going to be pretty bleak over the rest of the year.”

❝ We are making hay as the sun shines, but we expect figures to fall as the schools go back