Hoteliers on rising costs: ‘It was tough through Covid, but we are now looking at an even tougher situation’

Businesses in Cork consider closing floors and grouping guests together in order to reduce energy prices

“We’ve survived war and famine, so we will just have to cut our cloth and survive this too,” says Tom O’Donovan from O’Donovan’s Hotel in Clonakilty, west Cork, as he faces into one of the toughest winters he can remember in his 43 years in the business.

O’Donovan’s, a traditional family-run hotel has been a cornerstone of the local economy for almost 170 years, but Mr O’Donovan is first to admit that the past few years have been among the hardest he can remember.

“It was tough through Covid but there was support, but we are now looking at an even tougher situation,” he says.

For O’Donovan’s, like many other local businesses, soaring costs make the prospect of the traditionally quiet winter months particularly daunting. Mr O’Donovan says energy costs for the hotel alone have increased by €20,000 per month compared with last year.

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“There is the electricity of course. Ours has gone from €6,000 per month a year ago to €16,000 now, but we also have gas for cooking, oil for heating and diesel for water too and it’s all going through the roof, and that’s before you even look at the costs for supplies.”

Mr O’Donovan says the Government’s announcement in Budget 2023 of the Temporary Business Energy Support Scheme providing 40 per cent of the cost of the increase in energy bills up to €10,000 will be a help, but small hotels like O’Donovan’s will still be hit hard.

“The fact is we still have to find the 60 per cent and the increases are enormous, and VAT will also go back to 13 per cent next year so there isn’t a huge amount of help this time,” he says.

Mr O’Donovan says he can understand the Government’s reluctance to provide more support, however, in the face of rising hotel prices in Dublin.

The average room rate at O’Donovan’s this summer was €80 for a single and €130 for two people sharing, according to Mr O’Donovan, far from the hundreds being charged by some hotels in the capital.

He added: “Yes, we have put our prices up, we’ve had to. We went from €65 to €80, and I think that’s fair.”

As for the year ahead, Mr O’Donovan says the hotel will remain open but he may close the upper floor to save on energy costs and he may have to let some staff go if business is very quiet.

For Neil Grant, manager of the Celtic Ross Hotel in nearby Rosscarbery, it will also be a challenge to keep trading through the winter ahead but it’s one he is determined the hotel can achieve.

“The most important thing is that we keep trading to maintain the jobs we have here, that will be my top priority,” says Mr Grant.

The 66-bedroom waterfront hotel recently achieved four-star status and employs more that 40 people during the winter months, with that number rising to more than 100 during the summer.

Mr Grant says: “Eight or nine years ago the hotel would partially shut down during the winter but we took the decision then to open all year. You get a consistency of service and you can give people full-time employment that you just can’t if you are closing part of the week or for two or three months.”

Despite the cost pressures, he is also determined to keep prices affordable for visitors.

“I get very angry when I hear about the rip-off prices being charged by hotels. Maybe that’s true in Dublin but it’s definitely not true here. They should go to Sligo, Waterford, Donegal and Galway, and you’ll see a very different story. We were charging €127 at the height of the summer, we need repeat business.”

For the winter ahead it will be all about minimising costs at the Celtic Ross, but Mr Grant believes the hotel will keep trading.

“There will be pressure, the cost of everything is going up. The cost of replacing appliances has doubled, for example. Staff will be under pressure too, we will all have to go a bit further and still keep a smile on the face but I think everyone realises we have to keep the show on the road. We will close floors and group guests together to reduce energy costs, we might close parts of the hotel and only use one bar, for example. We will have to do all we can but I think, I hope, we can keep going all the way through.”