Cost-cutting hotels fall behind

HOTELS:SOME OF Ireland's luxurious hotels and tourism developments, built before the recession, are battling to maintain their high standards as prices tumble, says a new report.

The report says that the recession could do long-term damage to the standards of our tourism sector, as hotels and restaurants defer refurbishments and reduce staff numbers to cut costs.

A Changed World for Irish Tourism says that the financial state of many tourism and hospitality businesses is putting “extreme pressure” on the maintenance of quality and service standards.

The report, commissioned by The Irish Tourist Industry Confederation (ITIC), said the absence of funds for investment would result in little or no new products coming on stream and only essential refurbishment being undertaken. “Investment in training and development is also at risk.”

The report says the standard of the tourism product had probably never been higher before the recession but there are already signs that the lack of profitability and investment is having an impact.

“Many hotels are postponing refurbishment while the lives of car-hire fleets and coach fleets are being extended. In short, the industry faces a particular challenge to maintain its excellent quality and service standards in the face of falling demand, reduced margins and lack of available finance.”

The warning came hot on the heels of the Horwath Bastow Charleton study which found that one third of hotels were having difficulty meeting interest repayments on their bank loans. It said the average room rate had fallen by 20 per cent to €77.81 between 2007 and last year and was down a further 10 per cent in the first six months of this year.

A Changed World for Irish Tourism, prepared by Tourism and Transport Consult International, points to the fact that a recovery to pre-recession levels is not expected for up to five years. It highlights a collapse in tourist numbers from Britain which must be urgently tackled.

The report also highlights trends such as “bleisure” trips – where business people spent a few extra days in a country at the end of a work trip.

It says a new search for “authentic” travel experiences was apparent, partly as a reaction to the pre-recession era of conspicuous consumption. And it highlighted the phenomenon of “Gran Travel” where several generations take holidays together.