Profits at Irish hotels could decline by up to 70 per cent this year as the sector remains under severe pressure, according to a survey released today by specialist accountancy firm Horwath Bastow Charleton (HBC).
It says profitability for Irish hotels dropped 25 per cent last year and occupancy rates are at a 15-year low.
HBC partner Aiden Murphy said the concern was that “reduced sales and profit levels are reflective of the slowdown for the sector that accelerated in pace as 2008 ended”.
“As the Irish economy is in recession, unemployment levels are increasing and as curtailment of government agency expenditure continues, this will result in the hotel sector remaining under pressure for quite some time.”
The weakness of sterling against the euro had contributed to a sharp fall-off in visitors from the UK, which had accounted for almost half of all tourist visits to Ireland. Last year British tourist numbers were down by 164,000.
While there was a marginal increase in the number of domestic holidays, the average duration of hotel stay fell, leading to an overall decline of 9.5 per cent in expenditure by domestic holiday makers.
otels based in Dublin and in the luxury end of the market had been hit particularly hard, the survey noted.
Mr Murphy expects many hotels to face severe cash-flow problems in the near-term as the sector owes a combined €7 billion in development loans.
As a result he expects around 2,800 job losses in the sector due to seasonal closures.