Crisis in hotels a hot topic for industry get-together

CONFERENCE:THE IRISH Hotels Federation (IHF) hosts its annual conference next week against a backdrop of crisis in the tourism industry.

The fate of zombie hotels, the minimum wage and changes to the Joint Labour Committee (JLC) agreements will be among the issues discussed by the 400 delegates due to attend the conference on Monday and Tuesday in the Slieve Russell Hotel in Co Cavan.

The conference comes as recent figures show there are 82 hotels under the control of the National Assets Management Agency (Nama). A further 50 are in receivership.

There was some good news for the beleaguered sector from a new report which found that the average value of a hotel room in Dublin has stabilised after huge falls in 2009 and 2010.

The value was estimated at €150,000 last year, down 40 per cent from its peak in 2006 when it was estimated at €251,000 per room.

The fall last year was in the order of 5 per cent, but that followed on from a fall of 20 per cent in 2009 and another 19 per cent in 2008.

Similar peak-to-trough falls were experienced in Athens, the other European capital which was subject to an EU/IMF bailout. All cities in Europe have experienced significant declines in the value of the average hotel room as a result of the global recession though most are beginning to rise again.

The report, carried out by Savills, showed that the hotel industry in Ireland compared favourably with residential and commercial property where the falls were even greater but, on the other hand, hotel values only increased by 16 per cent during the boom years as a result of oversupply.

The IHF has made taking excessive capacity out of the system by closing zombie hotels one of four measures to rescue the hospitality industry.

The others involve the marketing of Ireland abroad, wage competitiveness, with the abolition of the JLCs, and an increase in the availability of credit from the banks.

Next week’s conference is likely to be one of the last events attended by the outgoing Minister for Tourism Mary Hanafin who is due to address delegates on Monday evening.

In a speech to mark the opening of National Employment Week recently, Ms Hanafin said the cut in the minimum wage from €8.65 to €7.85 an hour was working, however painful it was for individuals involved.

She said it was already allowing the hospitality industry to employ more people.

One of the key speakers will be Dr Kjell A Nordström, the academic and management thinker who has written two best-selling books, Funky Business – Talent Makes Capital Dance and Karaoke Capitalism: Management for Mankind about how companies can be distinctive in a business environment where so much is the same.

IHF president Paul Gallagher will give the keynote address about the state of the industry on the second day.

He will be followed by Aiden Murphy, an accountant who specialises in financial reviews of hotels that are in trouble.