EDITORIAL: Hoteliers put pressure on Government to tackle tourism concerns

Stubbornly high business-operating costs, coupled with concerns about the economic outlook for the year ahead, were weighing on the minds of hoteliers as they gathered last week for the Irish Hotels Federation’s (IHF) 86th Annual Conference in the Slieve Russell Hotel, Co Cavan.
Following a strong performance in 2023, IHF President Denyse Campbell pointed to a more challenging outlook for the Irish hotels sector in the year ahead, with forward bookings underperforming and business sentiment among hoteliers taking a hit.
Recent industry research carried out by the IHF shows a drop in levels of optimism across the sector, with only 47 percent of hoteliers reporting a positive outlook for trading conditions over the next 12 months. This contrasts sharply with 74 percent who reported a positive outlook at the same time last year.
Hoteliers ranked rising business costs as the most serious challenge facing their business this year, with early forecasts indicating further operating-cost increases of more than 8 percent over the year ahead, significantly outpacing levels of inflation within the wider economy. This follows a period of already unprecedented cost increases in the last two years.
Some 79 percent of hotels indicated they were concerned about the outlook for the global economy and the potential impact on their business. Forward bookings for the year ahead are now down 4.5 percent compared to this time last year, with 53 percent of hotels reporting a net decrease in bookings.
Of particular concern is the domestic market along with the UK and rest of Europe. Bookings for North America are holding up, however, which is very welcome given the growing importance of this key market as a source of tourism revenue.

VAT concerns
Ms Campbell said: “While it is too early to predict the overall performance for the year, initial indications are concerning and highlight the challenges our industry faces across key markets. This is at a time when consumer finances are under ongoing pressure and businesses are dealing with additional costs and a sharp rise in interest rates. We are also seeing the impact of the Government’s decision to increase tourism VAT, making us an outlier, with the third highest rate of VAT in Europe.”
The IHF now feel it is incumbent on the Government to do more to tackle the very high cost of doing business within the Irish economy. This is a major challenge for tourism and hospitality, the largest indigenous employer. Increasing costs are continuing to erode Ireland’s competitiveness as a destination, and this is jeopardising the sustainability of the wider industry – a vital part of the economy supporting some 270,000 livelihoods, 70 percent of which are outside of Dublin.
The IHF rightly feels the Government needs to do more to control costs, particularly for labour intensive industries such as tourism.
Commenting on levels of ongoing investment within the sector, Ms Campbell also noted that, having invested significantly in their properties over the last two years, many hotels are continuing to prioritise investment in maintaining a consistently high-quality offering for visitors.
Some 78 percent of hoteliers indicate they are planning refurbishment projects and increased capital investment over the next 12 months. These works include the refurbishment of guest bedrooms (56 percent), the refurbishment of common areas (47 percent) and the upgrading guest technology (30 percent).
There is no doubt the summer of 2024 is going to be a challenging one for the tourism industry in general, and the Government must be proactive in the coming months by taking steps to insure it makes financial sense for the public to holiday here at home rather than jetting off to the continent.