HOTELS AND the leisure industry are bracing themselves for a tough year ahead by laying off staff and introducing three-day weeks.
Business man Ben Dunne has implemented a pay cut at his three fitness centres and it emerged last night that Dublin's five-star Westbury hotel is considering laying off up to 20 of its 160 employees. No comment was available from the hotel owner, the Doyle Collection, but a source close to the group confirmed a review was under way.
The hotel has already told staff to take all holidays left over from last year and a week's holidays from this year's leave.
The Irish Hotels Federation (IHF) said three-day weeks, encouraging staff to take holidays and closing for longer periods at Christmas were "fairly widespread" practices.
Federation chief executive John Power said hotels were using shorter working weeks in an effort to hold on to the teams they had built up in recent years.
"The big challenge this year is survival," he said. "It's all about survival. It's not about return on investment and it won't be about that until the latter end of 2010 at the earliest."
He said wages now accounted for 40 to 50 per cent of turnover, so it was a key factor when costs were being cut.
Hotels were reluctant to comment on their staff reduction plans yesterday. The Shelbourne hotel did not respond to a query about its plans to reduce staff costs and the Gresham would not comment on its introduction of a three-day week.
Only the Four Seasons in Ballsbridge confirmed it was not laying off staff. General manager José Soriano said the hotel was taking "all necessary steps to remain healthy until the economy recovers. Instead of job losses, however, the hotel is managing costs and aggressively developing strategies to increase revenues."
The IHF criticised increases in local authority charges and said these charges were the greatest single cost after wages.
Hotel consultant Weldon Mather, of WM Consultancy, said hotels would have to tackle the crisis head-on by cutting rosters, scrutinising costs even more and engaging in aggressive marketing.
"It's too late to call for help when the bank refuses to extend the overdraft and cash runs out," he said.
Mr Mather also encouraged hotels, particular smaller ones, to use the internet to attract new customers.
Fitness centres are also under pressure, as many gym subscriptions come up for renewal this month.
Mr Dunne, who runs three fitness centres in Dublin, is implementing pay cuts ranging from 3 to 15 per cent for all staff from this month.
He is also looking at introducing three-day weeks for some staff and expects "a handful" of redundancies.
However, despite a quiet December, he noted that business this month was up by 7 per cent compared with the same period last year.
He has tackled the recession by dropping prices at his gyms. "You can join the club now for under €240. This time last year it was €300," he said.
"We are in a recession. Forget about brooding. Just get on with it and run your business."
He said he would build a fourth fitness centre if he got planning permission at his site in Glasthule.
Brendan Hackett, who trains gym instructors through his company, Motions Health and Fitness, warned that big gyms would have to work harder to retain their members this year.
Instead of seeking a year's membership upfront, they would have to be more creative and offer different payment options, he said.
"I don't think people will give up exercise because of the recession," he said, but added that they may return to smaller gyms with a more personal service.