Sunday 16 June 2019

Brexit causing concern for hotel owners and their staff

Brian McNamara of the IHF
Brian McNamara of the IHF

Business sentiment among hotels in Wicklow and across the country has dropped significantly according to the latest hotel barometer from the Irish Hotels Federation (IHF).

Less than half of hotels (49 per cent) nationally now report a positive outlook for the next twelve months compared with the 82 per cent who had a positive outlook this time last year. Key concerns for the sector include the escalating risk and uncertainty around Brexit, reduced visitors numbers from the UK and the increasing costs of doing business.

While 73 per cent of hotels have seen some increase in overall business levels this year, growth from North America and Europe has masked the poor performance of the UK market with visitors still down 5 per cent on 2016 due to persistently weak performance following the referendum. This is having a direct impact on hotels throughout the country with 52 per cent reporting a drop in business from Great Britain this year while 40 per cent have seen a drop in business from Northern Ireland. The vast majority of hotels (91 per cent) now express concern about the impact of Brexit on their business over the next 12 months.

Brian McNamara, Chair of the IHF's Wicklow branch said: 'We are increasingly concerned about the direction that Brexit is taking and the impact that heightened uncertainty is having on our sector. A disruptive Brexit would have enormous economic repercussions which would be felt directly by tourism businesses here in Wicklow and across the country given our heavy reliance on the UK market'.

Tourism currently supports 13,900 jobs in Wicklow and contributes some €174 million to the local economy annually.

Mr McNamara believes that, even if a deal is eventually reached, any prolonged uncertainty in the coming months could result in a further erosion of consumer sentiment.

'The consistent growth achieved over the last seven years in a dynamic and competitive international market cannot be taken for granted,' said Mr McNamara. 'We are particularly concerned with the Government's change in approach to tourism and the lack of recognition of the important role it plays as an engine of economic growth and regional balance. With the Brexit storm gathering, relentless increases in the cost of doing business, international trade wars, a slowdown in European growth and the increase in tourism VAT, there is little surprise in the drop in business sentiment. Many of our members are now re-examining their future investment strategies and taking a more cautious approach to planning for next year and beyond'.

According to Mr McNamara, however, only one in five hoteliers believe that the Government is doing enough to tackle the high cost of doing business in Ireland. Some 76 per cent of hotels have seen further increases in insurance costs this year. Of these, the average increase in premiums was 15 per cent. This is in addition to substantial increases in recent years. The IHF also believe that insurance costs have reached an unsustainable level, averaging €1,150 per room annually.

Mr McNamara has called on the Government to introduce a Tourism Satellite Account within the Central Statistics Office (CSO) to provide a full analysis of the economic activity in the tourism industry in Wicklow and elsewhere.

'It will also provide independent verification to assist those who rely on the National Accounts, where tourism is not identified, to inform their deliberations on taxation and economic policy,' he said.

Wicklow People