Most hotels are fearful over uncertainty posed by Brexit

BUSINESS sentiment among hotels in Cork and across the country has dropped significantly, according to the latest hotel barometer from the Irish Hotels Federation (IHF), with Brexit being cited as a major concern. 

Less than half of hotels (49%) nationally now report a positive outlook for the next 12 months compared with the 82% 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% 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% on 2016 due to persistently weak performance following the referendum. 

This is having a direct impact on hotels throughout the country with 52% reporting a drop in business from Great Britain this year while 40% have seen a drop in business from Northern Ireland. The vast majority of hotels (91%) now express concern about the impact of Brexit on their business over the next 12 months.

 Neil Grant, chair of the IHF’s Cork branch, and manager of Rosscarbery’s Celtic Ross Hotel, 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 Cork and across the country given our heavy reliance on the UK market.’

He added that even if a deal was eventually reached, any prolonged uncertainty in the coming months could result in a further erosion of consumer 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 Grant only one in five hoteliers believe that the Government is doing enough to tackle the high cost of doing business in Ireland. Some 76% of hotels have seen further increases in insurance costs this year. Of these, the average increase in premiums was 15%. This is in addition to substantial increases in recent years. 

Mr Grant states that insurance costs have reached an unsustainable level, averaging €1,150 per room annually.

 He 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 and how much it contributes to each county throughout the country, including Cork. 

On a brighter note, Christmas events remain a significant part of the business for more than half of the hoteliers surveyed (52%). Of those, almost half (47%) reported an increase in business this festive season compared to last year with over a third (36%) of those surveyed taking on additional staff for Christmas.

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