Price cuts and big name closure fail to dampen hotels' optimism

TOURISM OUTLOOK:FÁILTE IRELAND has sounded a cautiously upbeat note about the prospects for Irish tourism in 2010 despite the surprise temporary closure of one of Dublin's best-known hotels and a survey showing that the price of Irish hotel rooms continues to plummet.

“Operators are expressing greater confidence about the immediate future and at the very least are expecting greater stability,” Fáilte Ireland’s chairman, Redmond O’Donoghue, said. Research the organisation published this week indicated that two-thirds of businesses are confident that the next 12 months will be on a par with or better than 2009, compared with only 20 per cent who believed last January that tourism would hold steady.

But the Hospitality Ireland Hotel Tracker Index, also published on Thursday, showed that the average cost of a double room in December was €93.30, down more than 10 per cent on November and nearly €30 lower than in December 2008, when the average was €124.31.

The price squeeze appears to be hitting five-star hotels hardest, with their average room rates falling from €225.80 in August to €157.45 in December, a decline of more than 30 per cent.

“The fact that the average room rate has slipped below €100 is particularly troubling for the hotel industry,” Steve Wynne-Jones, deputy editor of Hospitality Ireland, said. The Irish Hotels Federation believes that a quarter of Ireland’s hotel rooms need to be closed, describing the sector as insolvent.

Dublin’s Montrose Hotel announced this week that it would be closing for at least three months because of difficult trading conditions. The hotel is understood to have been losing money in recent months, and bookings for the first two months of this year were poor. Some 80 staff have been laid off for at least 12 weeks.