Luxury hotels have top share of growth market

THE luxury hotel is the most lucrative sector of the hotel industry, according to a new survey sponsored by the Bank of Ireland and Charleton, the accountancy firm. It describes the profile of "a typical luxury hotel guest" as an overseas business traveller, who gives repeat business and pays by credit card".

The report, which was presented in Dublin yesterday by the Minister for Tourism and Trade, Mr Kenny, shows that the average cost of a room in a luxury hotel in 1995 was £86 a night. Luxury hotels enjoyed a bed occupancy rate of 70 per cent and rooms yielded £10,782 in pre tax profit for the year.

With a ceasefire in Northern Ireland, capital allowance write offs available in the Republic and tourist numbers soaring, it is not surprising that 1995 was a record year for expansion in the hotel industry. Thirty five new hotels being built and 2,000 rooms added to existing stock.

In contrast, there was no net increase in the number of hotels in the preceding five years. The increase in rooms between 1989 and 1994 was 3,000.

The survey, which was conducted on an all Ireland basis, shows that growth was so strong that almost all sectors of the hotel industry enjoyed increased business. The only sector to record a fall in business was ungraded hotels group in Northern Ireland.

Speaking at a reception yesterday to announce publication of the survey Mr Kenny said that his department's operational target to build the tourist industry's contribution to the economy from the present £1.3 billion to £2.25 billion by the end of the century was well on target.

During 1995 the number of visitors to the Republic rose by 575,000 to a record 4,256,000. Total bed nights in hotels rose, by 2,000 to 26,100. The largest increase was at the lower end of the market in the one star and ungraded hotels. Overall hotels increased its share of the accommodation market from 11 per cent to 12 per cent.

In Northern Ireland the total number of visitors rose by 263,000 to 1,557,000 and 11 per cent stayed in hotels. (No figure is given for hotel market share in 1994). In contrast to the Republic, the largest increase was recorded in bednights was recorded at the top of the scale in five and four star hotels.

The rate of return achieved per room in Northern Ireland was significantly higher than in the Republic, although room occupancy only averaged 62.4 per cent, compared with 65.8 per cent in the Republic. The growth in the luxury markets North of the Border explains the difference.

The Minister for the Economy and Agriculture in Northern Ireland, Baroness Denton, said yesterday that 1996 was proving a more difficult year for Northern Ireland than 1995. "While occupancy and enquiry levels are still ahead of 1994, "There has been a loss of momentum from the record breaking year of 1995".

Mr Colm Deignan, a partner in Horwarth Bastow Charleton and author of the survey, believes that the political situation will be a major factor in determining whether Northern Ireland Tourism can achieve continued growth.

The head of business marketing at Bank of Ireland, Mr Conor Patton, said that in the Republic specific incentive schemes had been a major factor in growth. Referring to the Access to Finance Scheme he said that the bank had administered £89 million out of a total fund of £208 million. Twenty five per cent of the total fund (£52 million) had been allocated to tourism related.