Profits in the hotel sector fell last year under the weight of higher wage and utilities costs, according to a survey released this morning.
According to Accountancy firm Horwath Bastow Charleton profits fell despite occupancy levels increasing to just under 70 per cent. Over the 12 months of 2006 an additional 5,500 new hotel rooms came on stream. The occupancy in Dublin hotels was 76.8 per cent and this reached a peak of 87 per cent in September when the Ryder Cup was in Ireland.
The average cost of a hotel room in a Dublin hotel was €136.63 in 2006, a rise of €5.43. The survey suggests that mid-price hotels were the most profitable.
However, hotels on the west coast struggled in 2006 and these have the lowest room rates and occupancy levels.
Aiden Murphy, a partner with Horwath Bastow Charleton said improved infrastructure was required for this region to develop.
The survey covered hotels offering 22 per cent of available hotel beds. Profit before tax on hotel rooms was 17.1 per cent in 2006, down from 18.3 per cent two years ago.