IHF Cork Reveal Results Of Annual Cork Hotels Survey
- €7.5m spent by Cork hoteliers on promoting the region in 2018 - €11.5m spent on capital investment / improving Cork’s hotel stock - 1,500 additional bedrooms in planning or in build in Cork City - 350 jobs available in the Cork hotel sector - Concerns over VAT rate, new employment legislation and Brexit
A recent survey of Cork hoteliers, conducted by the Cork branch of the Irish Hotels Federation (IHF), has shown that more than €11.5m was spent on renovations and improvements to hotels in the region in 2018, with more than 80% investing in capital expenditure. Individual hotel upgrades ranged from €50k to €2.5 million.
Local hoteliers spent a further €7.5m promoting Cork as a destination nationally and internationally, which was an increase of €2.5m from 2017.
On average, visitor spend was also up across all segments, in particular with domestic visitors, which increased by €10 per day in the first quarter of the year*.
Room rates on average increased by 15%, although the rate range remains broad across the region. The average room rate charged now ranges from €40 to €215 per night for a B&B in low season to 5-star city hotel in peak season. The average rate of hotels surveyed across the region was €109.
Neil Grant, chair of the IHF Cork branch, said its members are making huge efforts to now grow their businesses after years of recession, which in turn contributes to the local economy. “Our hotel members worked extremely hard to overcome the challenges of the last recession and it is fantastic to now see our collective efforts as a sector helping to attract additional tourism business to Cork. The substantially increased marketing spend hoteliers are making to promote Cork as a tourism destination is just one aspect of this,” he said.
Identifying the reasons why visitors choose Cork as a destination, hoteliers said the main selling points are corporate business travel, the Wild Atlantic Way and Ireland’s Ancient East tourism routes; food culture, destination hotels, accessibility, scenery, choice of accommodation, attractions like Blarney Castle, Fota Wildlife Park, hidden gems, the people, our vibrant city and the fact that Cork is a gateway to the South.
July to September was the busiest time of year for 96% of properties, and 35% of hoteliers said they believe there is an opportunity to grow business during the first six months of the year.
Growth opportunities identified through the survey for 2019 and 2020 include increased frequency and capacity at Cork Airport, promotion of Ireland’s Ancient East and the Wild Atlantic Way routes, expansion of hotel bedrooms, the corporate market, free entertainment in hotels and the region, and improved facilities.
The survey also revealed that more than 350 jobs are currently available in the hotel sector in Cork. Of these, 170 are full time and 193 are part time positions. However, 94% of hoteliers surveyed said they find recruitment a challenge and are struggling to find suitable staff.
Mr Grant said the IHF is taking a number of measures to address this, including a campaign to encourage students to consider a career in the hospitality sector after school, a local partnership with CIT to promote the industry and an apprentice initiative with the college to upskill local hotel staff, and they are also attending international recruitment fairs on behalf of members. “There are huge opportunities available in the hotel industry in Ireland, but currently we have to recruit outside of the country. The IHF recently launched a dedicated website, supported by Fáilte Ireland, called Get a Life in Tourism, which offers comprehensive information on the many training courses and careers available in tourism and hospitality. A career in the sector offers enormous potential for professional development and advancement,” he said.
More than 1,500 new bedrooms are due to come on the market in Cork City alone in the coming years, providing a 50% increase on the number of existing rooms currently available. Planning permission has already been granted for these pipeline projects and some are currently in build. In addition to this, the recently sold Moore’s Hotel and AOH Hall sites are likely to be developed for mixed hotel/office use.
Commenting, Mr Grant said “Whilst this is great news for the city, as it could attract more than 3000 extra people a day, our survey found that hotels ( city and county) are currently only averaging a 74% occupancy rate. Therefore, our members are concerned that the increase in bedroom provision could over-saturate the market, if the Cork Events Centre does not get underway soon.
“Many hoteliers applied to extend their bedroom capacity or build new hotels on the basis that the Events Centre would attract a significant increase in business and leisure tourism to Cork. It is therefore imperative to our industry and to the local economy that it comes to fruition and we need absolute confirmation on its delivery as soon as possible.
“If a big convention of 3,000 people was brought to Cork in November, it would justify the development of the additional bedrooms and would sustain growth of the sector, but if it doesn’t, it will be detrimental to the industry,” he said.
Looking ahead into 2019, almost 80% of hotels surveyed said they believe Brexit will affect their business while almost 100% said they are concerned about the increase in VAT, staff shortages, the recruitment legislation, and the additional capacity of rooms coming onto the market, without the confirmed promise of the Events Centre. Other concerns include the increasing cost of insurance, rising staff costs and the expected economic downturn in Europe.
“In addition to this, Ireland is also 22% more expensive for visitors from the UK on exchange rate change alone since 2012 and this could change again depending on the outcome of Brexit. This would have a significant effect on UK visitor numbers, our second biggest market!” Mr Grant said.
Commenting overall on the survey findings, Mr Grant concluded: “Our members have worked hard to survive and grow their businesses over the past few years and there is huge potential for continued growth in the sector here in Cork. Only recently “Pure Cork” took a stand at the holiday world show in Dublin and many of our members stood side by side with visitor attractions promoting the region, demonstrating that there is great teamwork in Cork city and county.
“However, we are now also facing new challenges as an industry that we need to overcome. We need to continue to work together - with the support of Government at local and national level - on innovation, international marketing and promotion, and on finding solutions to issues that affect our industry.”