Hotel business up, but Brexit a major worry
HOTEL and guesthouse owners in Wexford and across the country have seen an increase in business levels during the first six months of 2017 according to the latest quarterly barometer from the Irish Hotels Federation (IHF).
However, with the plunge in the value in sterling against the euro since the Brexit referendum, the numbers of visitors from the UK - the mainstay of the local tourism economy - have fallen significantly, leaving it fragile.
Tourism supports 7,700 jobs in Wexford and contributes some €223m to the local economy annually.
With CSO figures showing overseas visitors up over three per cent to the end of May, the industry survey shows that the domestic market is increasing with seven in ten hoteliers saying business levels are up compared to this time last year and overall, three quarters of hoteliers are reporting increased levels in business year on year.
The strong performance for domestic tourism looks set to continue into the busy summer season. Over two thirds of hoteliers say bookings are up while six in ten report that advance bookings for staycations for the remainder of 2017 are up too.
The general outlook for the rest of the year appears positive overall and Ireland looks on course to surpass the 8.8 million overseas visits set last year. More than half of hoteliers (52%) report increases in advance bookings from the United States, 35% for Germany and 27% for France.
However, Aidan Quirke, Chair of the South East Branch of the Irish Hotels Federation warned that Brexit is already impacting on tourism performance.
‘Visitor numbers are up, which is good news and the growth in domestic tourism is particularly encouraging as it extends beyond the traditional tourism hot spots and its impact on local economies can be felt more widely.
‘However, the latest CSO figures show a continued fall in UK visitors, our biggest market nationally, which illustrates the fragility of the tourism recovery in Wexford.’
‘Many of the consequences of Brexit are largely outside our control, so it is imperative that we mitigate the risks and potential damage where we do have some control over our destiny. Continued growth remains a priority for the sector, which is the country’s largest indigenous employer,’ said Mr Quirke.
He said this is achievable but requires specific actions.
‘Ireland’s competitive tourism offering will certainly help and this is underpinned by important measures as the zero rate travel tax and the 9% tourism VAT rate which brings us into line with other countries in Europe.
‘(bUT) we must also continue to invest in product development and marketing. Enormous strides have already been made in the development of our products and brands including Ireland’s Ancient East, for example. However, the recovery has not been felt to the same extent throughout the county.
‘ The UK market in particular provides the widest spread of visitors across Ireland and the broadest seasonality. Nine out of ten (91%) hoteliers nationally believe more needs to be done in terms of regional marketing in particular.
‘ Time and time again, Irish tourism has shown itself to be an excellent investment with every euro spent in destination marketing by the state resulting in €34 being spent by visitors in the country.’
Meanwhile, the latest IHF barometer also has good news for Wexford school leavers and those seeking a career in the hospitality sector.
Some 50,000 new jobs have been created nationally in tourism since 2011 and the industry is on track to create a further 40,000 jobs nationally by 2021.
According to the latest barometer three in five (61%) hoteliers have recruited new staff over the past 12 months and nearly three in ten (29%) are planning to increase staff numbers over the next 12 months.
Mr Quirke said that the industry is looking to recruit over 6,000 entry-level employees nationally each year across all areas of its operations. The tourism industry now supports approximately 230,000 jobs - equivalent to 11% of total employment in Ireland.
‘Increased confidence is also allowing hoteliers across the country and in Wexford to invest more freely in their businesses with almost all hotel and guesthouses (91%) indicating that they intend to invest in refurbishment and increased capital expenditure within the next year.
‘Most (94%) of these are planning refurbishment projects while over a third (37%) intend to invest in new technology for the properties. One in five (20%) plan to expand their existing premises.
‘However, insurance remains a pressing issue for all hoteliers. Over half (51%) report that rising costs are having a very significant impact on their businesses. Insurance costs for the sector have now reached €42 million this year, equivalent to approximately €730 per bedroom per year.
Mr Quirke welcomed the commitment of the Government and the Tánaiste and Minister for Enterprise and Innovation Frances Fitzgerald to address the spiralling cost of insurance.
However, he said that compensation pay-outs are not benchmarked internationally with the result that Irish compensation levels for injuries continue to be out of kilter when compared with other countries.