The Irish Hotels' Federation (IHF) today called on the Government to intervene urgently to safeguard the long-term viability of Ireland’s tourist industry.
Addressing over 200 delegates at a special meeting of members at the Grand Hotel, Malahide, IHF President Matthew Ryan said unless urgent action is taken to address the financing crisis in the sector, there would be "immediate and devastating implications" for otherwise viable hotels and guesthouses.
“Our members are struggling to deal with decimated revenues while their cost bases have yet to adjust to the economic reality on the ground. Following years of substantial investment, we have an excess capacity of 12,000 bedrooms which is now exacerbating the situation," Mr Ryan said.
"We are calling on the Government to intervene and facilitate an orderly restructuring of the sector in a way that is sustainable and allows our members to continue to be major employers and contributors to the Irish economy.”
“Many hotels are now in crisis talks with banks and in some cases banks have taken control of hotels. Unless a strong set of public policy measures is put in place to support hotel finances, the sector is going to experience a high casualty rate,” Mr Ryan told the meeting.
The problems faced by the sector include the phenomenon whereby hotels that have fallen under the control of banks are operating at below-cost prices, which the IHF says is distorting the market with unfair competition.
The federation is concerned the National Asset Management Agency (Nama) could introduce further market “distortions” when hotel assets transfer to its control.
Measures designed to avoid potential distortions were among the proposals submitted by the IHF to the Government last month.