IRISH HOTEL prices are now among the cheapest in Europe. Rather than celebrate this competitive advantage and exploit it properly, however, pressure is being exerted on the Government to close down an estimated 150 hotels with their 15,000 bedrooms at the taxpayer’s expense. The result could lead to higher hotel prices and fewer tourists. Having created a surplus of accommodation through overly-generous tax-breaks during the boom years, is the Government going to celebrate the economic bust by further fiscal meddling?
Close on one million fewer tourists came to this country last year as the effects of the international recession took hold and the euro’s high value made Ireland an expensive destination. Fierce competition within the industry led to an average fall of 21 per cent in the price of accommodation and parts of the sector are now struggling to survive.
Cost-cutting has already affected employment levels and wages. And hoteliers are now calling for a reduction in local authority charges and an end to unfair competition from bank-owned hotels.
They deserve some sympathy. But, as Prof Cathy Enz of Cornell University advised the Irish Hotel Federation conference, members should concentrate on developing facilities they already control, while adding value and special interest attractions. They should not expect a State bailout. As things stand, the home market accounts for two-thirds of hotel business. That may continue because of a depressed economy and a reluctance by over-65s, in particlar, to travel abroad.
If local establishments promote their services and attractions through the internet, however, much more foreign business can be secured. With hotel prices and the value of the euro down on last year, the prospects for growth are good in Britain and in the United States.
These two markets showed the sharpest drop in tourist numbers in 2009. There was a fall of more than 600,000 visitors from Britain alone. Tourism Ireland has embarked on a major promotional campaign there. That is a welcome development. But, with a growing number of families designing their own vacations, many hotels will succeed or fail based on the quality of their websites and the kind of attractions offered.
Some grant-aided hotels will, inevitably, be transferred to Nama. That does not mean they should automatically close. A small number may, with changes in layout, be suitable for use as State nursing homes or psychiatric care units.