Sunday 4th March 2012

Irish Tourism Industry in Two Speed Recovery
Irish Hotels Federation’s 2011 Annual Report Reveal

Irish tourism remains in a fragile state with hotels and guesthouses across many parts of the country struggling to cope with a two speed recovery in the sector. Speaking today at the Irish Hotels Federation’s (IHF) 74th Annual Conference, Tim Fenn, Chief Executive states that improvements in occupancy levels across Dublin, the West and South West masked disappointing figures throughout the rest of the country right up to the end of 2011. While welcoming a 7% increase in visitor numbers to 6.26 million, Mr Fenn notes the figures reflect a recovery from the disastrous impact of the volcanic ash cloud in 2010 which wiped out a large amount of that year’s tourism revenues.

Turning the British market around remains the most significant challenge facing the sector, with the market having experienced a cumulative drop of 26% in visitors since 2007. Mr Fenn states: "The fall-off in British visitors from 3.8 million in 2007 to 2.8 million last year is a stark reminder of the amount of ground lost and the urgent need to reinvigorate our most important tourism market.”

“A 3% increase in British visitors last year is some level of progress but we need innovation and creative thinking from our tourism bodies to encourage the level of British visitors to return. This must include campaigns specifically focussed on attracting a greater spread of visitors to the regions, promoting specific reasons to visits – whether activity-based, location-based or focusing on heritage and environment,” says Mr Fenn. “When people think of holidaying in Ireland, the image should be of a fun and vibrant destination – blessed with a wealth of scenic attractions, steeped in history and culture and offering a warm and friendly welcome. This is the challenge we face.”

Welcoming an increase in total tourism revenues to €4.77 billion in 2011 (up from €4.6 billion in 2010), Mr Fenn noted that the sector is still recovering from the 27% reduction in overseas revenue since 2007. Revenues were made up of €3.56 billion from overseas visitor and €1.21 billion from the domestic market. The high dependence on the home market continued in 2011, with 70% of hotel bed nights now coming from island of Ireland. Despite a 1% recovery in hotel room occupancy to 57% in 2011, most hotels and guesthouses are still witnessing severe pressure on room rates.

Regionally the sector is experiencing a two speed recovery:

· Only three regions experienced increased room occupancy rates to 2011: Dublin 64% (up 2%), the South West 63% (up 5%) and the West 60% (up 4%).

· In the Shannon region, occupancy rates remained unchanged for the third consecutive year at 51%.

· Reduced room occupancy were seen in the East & Midlands 41% (down 1%); South East 56% (down 1%) and North West 47% (down 3%).

"Hotels and guesthouses are struggling to deal with reduced revenues that are effectively the lowest room rates in Europe. Our members are offering prices that give very little return but, in the current climate, it's the only option to stay in business,” says Mr Fenn. “Value has never been better for consumers but it comes at a cost to the sector struggling under high operating costs and exorbitant local authority rates."

Notwithstanding the downturn, tourism remains Ireland's most important indigenous industry and a critical component of the export economy. Tourism accounts for almost 4% of gross national product and brought in €3.56 billion in foreign exchange earnings last year. With 180,000 people employed in tourism, the industry supports one in every 10 jobs in Ireland - of which 54,000 are employed in the hotels and guesthouse sector across every village, town and city. Derived spend from every tourist euro is enormous for the Government with approximately 65 cent in every euro going back by way of some form of tax or levy.

Breakdown of Overseas Visitor Numbers

FOR INFORMATION: 
Siobhan Molloy/Eoin Quinn
Weber Shandwick Mob: 086 817 50 66/087 233 2191

HOTEL & GUESTHOUSE STATISTICS
74th IHF ANNUAL CONFERENCE
Monday 5th & Tuesday 6th March 2012

• 6.26 million overseas visitors in 2011; 7% increase on 2010;
• Tourism accounts for almost 4% GNP;
• €3.56 billion foreign exchange earnings in 2011 compared with €3.4 billion in 2010;
• Total tourism revenue of €4.77 billion; from €4.6 billion in 2010;
• 856 hotels (883 in 2010) with 57,859 bedrooms (59,377 in 2010);
• 264 guesthouses (286 in 2010) with 3,249 bedrooms (3,444 in 2010);
• Total of over 61,108 hotel and guesthouse bedrooms in Ireland.