Mayo hotels’ business sentiment slips

BUSINESS sentiment in Mayo and across the country has slipped, according to an industry survey undertaken by the Irish Hotels Federation ahead of its annual conference in Galway.

While 40% of hotel and guesthouse owners across the country report an increase in business levels compared to this time last year, a slightly higher number (45%) are reporting a drop. With the survey also highlighting continued concerns around the high cost of doing business, business sentiment, not surprisingly, has slipped for the second year in a row.

Just one third are reporting a positive outlook for the year, compared to 40% this time last year.

Hoteliers’ concerns about the high costs of doing business include what Darren Madden, chair of the Mayo branch of the Irish Hotels Federation, described as ‘hidden’ costs, which he says aren’t readily considered when discussing the challenges facing sector.

“Local authority rates, for example, are the single biggest cost that tourism businesses have no control over. Hotels are making a disproportionate contribution to local authority funding with many hoteliers levied rates of up to €3,000 per bedroom while the average local authority rates equate to €1,500 per room.

“A shake-up of local government funding is long overdue. We are calling on the incoming government to ensure a fairer distribution of the rates burden right across the country. Hotels are willing to pay fair and reasonable rates but recent commercial revisions have led to excessive increases in many cases,” he said.

Higher water charges are another worry raised by members in the survey. Mr. Madden said that hoteliers have serious concerns about the approach taken by Irish Water in relation to harmonisation and increases in the overall cost burden on businesses.

“These proposals will impact significantly on our sector given the relatively high usage of water by hotels, particularly by those premises with leisure facilities. The proposed increases, in many cases, amount to 30% over three years, which are completely unreasonable and a significant added pressure for a sector that is so price-sensitive.”

The threat of a disruptive Brexit remains a significant concern for the vast majority of hoteliers. The survey shows that both the British and Northern Ireland markets continue to be challenging for the hotel sector.

Over 40% have reported a fall in business from Northern Ireland with more than 60% seeing a drop from Great Britain. These reductions are being offset to some extent by the performances of the domestic and US markets, which remain buoyant.

Home grown business is up year on year for close to half of hoteliers surveyed (46%) while over a quarter are reporting an increase in business levels from the US. Just over 40% are reporting an increase in forward, or advance, bookings for the remainder of the year, while a similar number are reporting a fall.

While business sentiment may be subdued, hoteliers are continuing to invest in their properties with over three quarters planning to undertake refurbishment or capital expenditure projects during 2020.

“Irish tourism cannot afford to stand still. It supports approximately 260,000 jobs, including 5,800 in Mayo, contributing over €208 million in revenue to the Mayo economy. It is also highly competitive and we compete internationally for business every day of the week. Irish hotels are renowned across the world for the quality of our properties and our high standards of service. Maintaining such a reputation requires continued investment to ensure our product remains fresh and relevant in the face of evolving consumer tastes,” said Mr. Madden.