What’s on the Horizon for Hospitality
Post the festive period, most industry participants have experienced positive trading and an uptake in business. Hotels, restaurants, entertainment venues all noted a demand for bookings and reservations. Long may this continue! However, dark clouds are appearing on the horizon. Serious concerns are being expressed about the global crisis that is threatening the sector: crises that are emanating from other countries; situations beyond the government’s control.
The continuing energy costs, for example, are a major burden despite the intervention of government supports. Increases in the cost of energy are impacting trading. The average increased cost is estimated to be around €46,000 per month, compared to 2019. Staffing is still a challenge (but there are small signs of improvement in recruitment). Then there is the worrying prospect of VAT increasing to 13.5% in February.
The less talked about scenario is the lack of availability with respect to bed stock. The horrendous situation in Ukraine has put unbelievable pressure on the need for accommodation here in Ireland and hotels are facilitating this unwarranted demand. It’s a sensitive and difficult situation to deal with and many in the sector are unwilling to discuss or challenge the current government policies.
A number of people attending the World Travel Market (WTM) in London, while preferring to remain anonymous, confided their concerns to me. The main concern was that some inbound operators will bypass Ireland due to the low availability of bedrooms. There is evidence that some key European inbound operators, unable to get the bed commitment in Ireland, are heading to Italy, Portugal, and other destinations. Indicators suggest our capacity will increase in 2023, ensuring extra tourist numbers. The downside is that those tourists may arrive to find they cannot rent cars, limited bed availability, and higher-than-anticipated prices. The result may be reputational damage to the industry.
It is estimated that in excess of 20% of hotel rooms are now allocated to support Ukrainian and other refugees.
Read the full article below:
Read the full November / December 2022 Magazine Publication.