The latest industry survey from the Irish Hotels Federation (IHF) reveals the enormous challenges facing hotels and guesthouses across Ireland as demand continues to plummet as a result of the Covid crisis.
The impact on employment and people’s livelihoods is stark for an industry that supported 270,000 jobs nationally at the beginning of the year − one in 10 of all Irish jobs. An estimated 100,000 jobs of these have been lost so far this year and a further 100,000 are now at imminent risk in the coming weeks.
With the summer season finished, Ireland’s hotels and guesthouses are now reporting a 70% drop in projected revenues for September compared to this time last year.
This follows a very challenging July and August with average national occupancy at 49%, representing an enormous drop compared the 90% occupancy achieved during these key summer months last year.
Breakdown of occupancy results for September/October 2020
National room occupancy: 24%
Dublin City and County: 12%
Other cities: 24%
Rest of country (excluding cities): 30%
Border region: 33%
Midlands / Mid East: 22%
South East: 41%
South West: 31%
Commenting on the results, chair of the South East branch the Irish Hotels Federation, Colm Neville, said that the figures highlight the requirement for further sector specific measures to support Irish tourism. “Our industry is operating in a quasi-lockdown. The existing supports are totally inadequate for our industry given the current restrictions. If appropriate measures are not put in place, more jobs will be lost.
"Prior to the Covid crisis, tourism supported 6,200 jobs in Carlow and Kilkenny, contributing €163 million to the local economy. With a predicted revenue loss of €120 million, 4,600 of these jobs are now under threat.
“A severely devastated tourism sector would be a major loss to the economy and society for many years to come. This can and must be avoided. We are doing everything we can to protect public health whilst also helping to restore the economy and safeguard people’s livelihoods, but we face extraordinary challenges. These have been greatly exacerbated by the additional restrictions introduced last month, including limiting indoor gatherings to no more than six people.
“Businesses are, in effect, operating under close to lockdown conditions. This flies in the face of the detailed operational guidelines that are in place, endorsed by the HSE, HSA, HPSC and the FSAI as well as hotels’ proven track record in managing gatherings safely. It is our belief that the controlled environment provided by hotels can safely accommodate gatherings of significantly more than six people, which are an essential part of the fabric of Irish life.
“A major frustration for us continues to be the lack of meaningful consultation with our industry in advance of new restrictions being announced by Government. All areas of society negatively impacted by Covid-19 should be consulted, including businesses, when developing the Roadmap for Resilience and Recovery, which is due to be published on September 14. Public health goes hand in hand with ensuring a viable economy when this pandemic has passed.”
Commenting on the additional Government supports required for the tourism industry, Mr Neville said: “The measures contained in the Government’s stimulus package do not go far enough to address the unique and existential challenges facing our industry. In particular, they fail to deliver adequate supports around competitiveness and liquidity in particular.”
The IHF is calling on the Government to implement the following measures as a matter of urgency:
Review of 6-person limit: Hotels provide a very safe environment in which to hold indoor gatherings in a controlled manner. Urgent approval of a hotel protocol is required to enable indoor gatherings of up to 50 people based on six people per table and subject to strict time-limits, physical distancing and protocols around wearing PPE and sanitisation.
Employment Wage Subsidy Scheme (EWSS): If jobs are to be retained, the EWSS rates of support must be increased to the previous TWSS levels of €350/€410 per week. This would make it possible for employers to retain staff during the difficult winter/spring months ahead and to facilitate training and upskilling structures designed to allow employees get personal benefit from this challenging period and to help the industry prepare for post Covid-19 recovery opportunities. Qualification for the scheme should be based on performance from March until the end of the year with payment made on a weekly basis to assist with cashflow. The scheme should be continued until the impact of Covid-19 restrictions has fully abated.
Liquidity measures: Additional liquidity measures are required to help fund hotels during the coming months as a result of the cash flow lost out due to Covid-19 restrictions, including extension of the moratorium on bank term loans from six months to 12 months.
Local authority rates waiver: The waiver period should be extended for tourism businesses to coincide with business interruption due to Covid-19 and for a minimum of 12 months. After that, payment of local authority rates should be based on reduced levels of activity due to the crisis and until the industry has recovered.
Reduction in tourism VAT to 9%: Permanent restoration to 9% to assist recovery and secure a viable and sustainable future for tourism. Reducing VAT will not only provide a stimulus in the Irish economy but also improve our competitiveness as an international tourism destination.
Testing regime: As an island nation with an open economy, we have to restore international travel safely as soon as possible. An effective tracking, tracing and testing regime must be introduced to facilitate this and to protect the health and livelihoods of all.
“Safeguarding public health is an absolute priority for the Irish Hotels Federation and our members, who are fully committed to supporting the Government in the task of supressing Covid-19. We also wish to be part of the process of restoring the economy and the livelihoods of the almost 270,000 people who worked in our industry last year. But we need support now so we can play our part again in the recovery. The National Economic Plan in October will come too late for many,” said Mr Neville.