Many hotels ‘pay €1,000 per room for insurance’
MANY hoteliers pay more than €1,000 per room to cover liability claims in a system where “the scales of justice are tipped firmly in favour of the plaintiff ”, according to the hotel industry chief.
“For an industry that is so price-sensitive, this level of cost is completely unsustainable,” Irish Hotels Federation (IHF) president Michael Lennon told his annual conference yesterday in Galway.
He blamed the legal profession for making it prohibitively expensive for many hotels to defend their reputation – and no-claims benefits – in court.
“The exorbitant fees being charged by lawyers are deterring insurance companies from pursuing cases through the legal system,” he said.
Earlier, the IHF said only a third of its members saw a positive outlook for 2020.
That is down from the 40pc positive outlook a year ago, 79pc two years ago and 92pc five years ago, when US, UK and European visitor numbers were growing by double digits.
This two-year slump in confidence – attributed mainly to fears that Brexit could weaken UK trade – comes despite continued modest growth in the hospitality sector.
The number of visitors to Ireland rose last year by 1.8pc to a record 10.8 million, and Tourism Ireland has targeted 1pc growth in visitor numbers this year, alongside a 3pc growth in revenue. But most of the federation’s members – around 62pc – were reporting a drop in British trade this year, with the economic reality of Brexit yet to bite.
This was being only partially offset by a growth in domestic demand for rooms, with 46pc reporting increased Irish bookings so far this year.
The US market appeared in flux, with 27pc experiencing higher American bookings than a year ago, versus 33pc on the decline.
Mr Lennon called on the incoming Government to reverse recent “excessive increases” in some hotels’ rates bills, and to protect the sector from potential 30pc hikes in their water charges, “given the relatively high usage of water by hotels, particularly by those premises with leisure facilities”.
Despite their relatively glum mood, more than three in four hoteliers and guesthouse operators said they planned to refurbish or upgrade their premises this year – including 7pc to build new leisure facilities.
The conference agenda highlighted the need for hotels to meet customers’ rising expectations, and to compete with Airbnb and other online disrupters offering short-term lodgings.
The federation represents nearly 1,000 hotels and guesthouses, offering nearly 63,000 rooms nationwide.