Wednesday 7 December 2016

Mothball half-full hotels until recovery says industry chief

Hospitality

Gordon Deegan

Published 15/12/2011 | 05:00

Hotels with under 50pc occupancy should be mothballed or put out to tender for alternative use.

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That is the view of Michael Vaughan, vice president of the Irish Hotels Federation, who says there is an over-supply of 10,000 rooms in the hotel sector.

Speaking at a tourism conference at Bunratty, Co Clare, Mr Vaughan said: "Hotels with under 50pc occupancy should be mothballed or put out of use until the market comes back in play."

He added: "Tourism Ireland is hoping for eight million visitors next year and the industry would need close to 10 million tourists before we could fill all of the hotels.

"I am not being pessimistic. I am being realistic. We are looking at a number of years before we can deliver on that."

Mr Vaughan said there were a number of hotels being run by the National Asset Management Agency and receivers that were operating below cost.

The Lahinch hotelier said: "This is happening on a large scale. These are strange times and there is no economic sense to what is going on."

Mr Vaughan said that if the 10,000 hotel rooms were taken out of the sector, it would allow the remaining hotels "to return to reasonable levels of occupancy and possibility of profit".

The State, he said, could be quite innovative concerning the future uses of the hotels.

"One hotel in Cork has been transformed into a local national school. There is a tremendous case for hotels becoming respite care centres. Realistic alternatives have to be developed where the hotel will never trade well."

Also at the conference, the chief executive of Shannon Development, Dr Vincent Cunnane, said that while the agency was subject to two separate government reviews "it is business as usual at Shannon Development".

He said: "We have two reviews. One under tourism and a second on the wider activities of Shannon Development.

Strong

"The Midwest Task Force report and recommendations is very strong on regional development and, in this region, regional development is exemplified by Shannon Development."

He added: "I am quite happy and positive to be reviewed in the context of the Midwest Task Force Report . . . it is in everyone's interest that there is an independent review and we will engage with them.

"This is nothing new for Shannon Development. We are over 50 years in operation. It is not the first time that we have been reviewed and it won't be the last."

He added: "We have been here before. I certainly believe that we have a great story to tell. It is a story of innovation from day one to this day. It is a company that continues to re-invent itself."

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