Hotels facing a very difficult start to 2021 – IHF

The Irish Hotels Federation says hotels and guesthouses in Donegal are facing their harshest ever start to a new year due to a collapse in bookings.
Figures published today show that in the Border region, booking levels for hotel rooms are at 7% for January and 6% for February. This follows already historically low occupancy levels of 18% being reported for December.
All three figures are below the national average.
Meanwhile, the IHF’s Chair in Donegal Paul Diver says the situation is being exacerbated because hotels are now excluded from the Covid Restrictions Support Scheme………..

Statement in full –

DONEGAL HOTELS BRACING FOR BLEAK START TO 2021

Collapse in Room Bookings for January and February

• Latest industry survey shows booking levels of just 7% for January and 6% for February
• Historically low occupancy levels of 18% for December
• Hoteliers say Government excluding hotels unfairly from CRSS supports

Friday, 18^th December 2020                      Hotels and guesthouses in Donegal are facing their harshest ever start to a new year due to a collapse in room occupancy figures according to the latest industry survey¹ from the Irish Hotels Federation (IHF). In the Border region, booking levels for hotel rooms of just 7% are being reported for January, dropping back to a mere 6% for February. This follows already historically low occupancy levels of 18% reported for December.

Chair of the IHF Donegal branch, Mr Paul Diver is calling on the Government not to renege on its budget commitment to the sector, urging it to review the operation of its Covid Restrictions Support Scheme (CRSS) which currently excludes hotels.

“The easing of inter-county travel tomorrow (Friday, 18^th) has led to a marginal increase in bookings over the past week. While any increase is very welcome, hotels are still experiencing a dramatic fall in business levels, when compared to December last year. Traditionally, the four weeks of Christmas trading are absolutely vital to hotels in terms of sustaining them during the first few months of the following year, when business levels tend to be lower. Business has been effectively wiped out this year due to Government restrictions while continued uncertainty over Covid restrictions is having a devastating effect on bookings for the start of next year.

“Yet, due to an anomaly² in how the Government has structured the Covid Restrictions Support Scheme, hotels are now being excluded despite a record fall in revenues, even where they meet the required 75% drop in turnover³.  We are calling on the Government to review the operation of the scheme as a matter of urgency.

With the local authority rates waiver due to lapse on 31st December 2020, the IHF is also seeking an extension of the period for a further six months at least – to 30^th June 2021. “The time-period should coincide with business interruption due to Covid. After that, payment of local authority rates should be based on reduced levels of activity due to the crisis and until the industry has recovered. Businesses cannot be expected to pay rates on historical turnover figures that do not reflect the significantly lower levels of business that hoteliers are experiencing. Pre-Covid, tourism in Donegal, of which hotels are a key component, supported 7,500 jobs and generated €249m in local revenues,” added Mr Diver.

Commenting on the lifting of inter-county travel restrictions on Friday, Mr Diver said: “Hotels and guesthouses in Donegal are looking forward to welcoming guests back over the festive period and really appreciate the support shown by customers throughout what been a year of unprecedented challenges for the hospitality sector.  One thing is for certain, guests can be assured of a very warm welcome, with hoteliers throughout the country pulling out all the stops to ensure they have a truly enjoyable, very safe and well-deserved break away this Christmas.”

Breakdown of occupancy results for December ‘20 / January ’21 / February ‘21:

• National room occupancy: 25% Dec (8% Jan / 6% Feb)
• Dublin City and County: 25% Dec (6% Jan / 5% Feb)
• Other Cities: 33% Dec (10% Jan / 6% Feb)
• Border region:  18% Dec (7% Jan / 6% Feb)
• Mid-West: 29% Dec (8% Jan / 6% Feb)
• Midlands / Mid East: 34% Dec (11% Jan / 8% Feb)
• South East: 27% Dec (13% Jan / 10% Feb)
• South West: 22% Dec (8% Jan / 5% Feb)
• West: 24% Dec (10% Jan / 8% Feb)

**see note below for description of regions

¹IHF Survey – The survey was carried out on 15 – 17^th December 2020 and the results are based on the responses of 290 properties with 30,650 guest room capacity spread across the country.

²Hotels are currently excluded from the CRSS at Level 3 restrictions, because according to the Government,  people are not being restricted from entering a hotel, they are simply being restricted from ‘leaving their county’ in order to enter a hotel. The effect of this ‘nuanced’ interpretation of the wording is that most hotel accommodation business is being restricted. Yet accommodation providers are specifically excluded from qualifying under Level 3 restrictions even where they meet the required 75% drop in turnover criteria.

³Turnover for the period of the restrictions can be no more than 25% of an amount equal to the average weekly turnover of the business in 2019.

** Regions/ Descriptions

• Border region: Donegal, Sligo, Leitrim, Cavan, Monaghan
• Mid-West: Clare, Limerick, Tipperary
• Midlands / Mid East: Kildare, Laois, Longford, Louth, Meath, Offaly, Westmeath, Wicklow
• South East: Carlow, Kilkenny, Waterford, Wexford
• South West: Cork, Kerry
• West: Galway, Mayo, Roscommon

Tourism sector at a glance (prior to COVID-19 pandemic)

• 10.9 million out of state visitors
• Tourism accounts for almost 4% of GNP
• Total tourism revenue of €9.2 billion in 2019 (including carrier receipts)
• Tourism industry created over 90,000 new jobs since 2011. Before the COVID-19 crisis it supported almost 270,000 jobs, equivalent to 11% of total employment in Ireland with over 65,000 of these jobs in the hotel sector alone.
• €7.25 billion in foreign exchange earnings
• €1.96 billion in domestic tourism revenue in 2019
• Total of 62,897 hotel and guesthouse bedrooms in Ireland (2019)