Pre-tax profits per room in the hotel industry in the Republic increased by an average of 8.5 per cent last year, despite a 3 per cent increase in the number of rooms.
In Northern Ireland, profits per room fell by 3 per cent, but the industry is optimistic that political stability will lead to an increase in visitors.
The figures are contained in the annual hotel survey in the Republic and Northern Ireland, conducted by Horwath Bastow Charleton in association with Bank of Ireland, and published yesterday.
The number of hotels in the Republic increased by 13 to 730 and the number of rooms by 800 to 27,200. Occupancy levels were up just 1 per cent, so increased profits reflected improved cost control and an increase in the average rate per room.
In the Republic, the average profit before tax per room was £4,488, up from £4,135 the previous year. There was particularly strong growth in the luxury hotels sector, with the average daily room rate increasing from £101 to £110 and profit before tax per room increasing to £11,863 from £11,279 in 1996.
In Northern Ireland, occupancy fell to 57.9 per cent (from 58.3 per cent) and pre-tax profit per room fell from £3,796 to £3,661. There was an increase in the number of hotels (up two to 137) and rooms (up 494 to 4,469), but a fall-off in business, probably because of the strength of sterling against the pound, and political uncertainty.
Mr Michael Connolly, general manager, business banking, at the Bank of Ireland, said the resounding Yes vote on the Northern Ireland Agreement is expected to significantly improve the popularity of the Republic and Northern Ireland as a European holiday destination.
Mr Colm Deignan, of Horwath Bastow Charleton, said that although the industry showed signs of stabilising after a period of intense growth over the past two to three years, there was continuing confidence in the sector.
"An additional 4,100 rooms are being proposed for the remainder of 1998 and almost three-quarters of these will be in new hotels," he said. The increase will be strongest in Dublin.
"The number of hotel rooms in Dublin is likely to exceed 10,000 by the year 2000, which is an increase of 100 per cent since 1993. The increase for the rest of Ireland is unlikely to exceed 50 per cent for the same period."
