Hotels – consistently one of the tourism industry’s best-performing sectors – say they have not done well this summer. Only 12pc had an increase in visitors, while 57pc reported a decline, with all markets affected.
The average room yields were down on summer 2023, and profitability is now a major concern for hotels, which say that rising costs are eroding their operating margins.
Other factors that affected their performance were people not having enough disposable income (cited by 65pc of hotels surveyed); Irish holidaymakers going abroad (55pc); and the weather (54pc).
The main worry for self-catering operators is of Irish people going abroad for their holidays
All these factors combined to reduce profitability for four out of every five hotels this summer, according to Fáilte Ireland’s September update. Only 7pc said profitability was up.
In terms of average room yield, 45pc said it was down, and 36pc said it had improved.
“The struggling performance of the hotel sector compared to last summer is reflected across all of the Irish markets,” the survey says. “In particular, the sector has not seen as many longer leisure stays (of more than one week).”
The findings for the restaurant sector were even more downbeat.
The road to Dunquin Pier in Co Kerry. Photo: Getty
While 16pc said they had more customers this summer, 73pc reported that business was down.
“The decline is seen in all markets,” the Fáilte Ireland survey says. “There are currently very few businesses which foresee an upturn in performance. Over half (53pc) of restaurants say there is ‘nothing to be positive about’ – by far the highest proportion of any sector to say this.”
The biggest concern for restaurateurs is costs, especially payroll, which was mentioned by 88pc of those surveyed. Other concerns include availability of accommodation for staff (mentioned by 56pc), and repaying debt (cited by 36pc).
The biggest concern for restaurateurs is costs, especially payroll
Pubs and bars also had a difficult time, with only 13pc saying they had more customers this summer – 66pc had fewer.
“Remaining profitable, or in business at all, is a significant challenge,” the survey said, with 82pc of operators in this sector reporting that profitability was down this summer.
Payroll costs were again mentioned as the leading concern, with the cost of insurance mentioned by 57pc of firms, the highest proportion of any sector.
B&Bs was another sector which suffered an indifferent tourism season, with only 17pc saying they had more guests compared with the summer of 2023. Meanwhile 36pc had fewer.
Profitability was down for just over half of B&Bs, and up for only 10pc.
However, the sector was one of the few to report an increase in visitors from overseas, with 40pc saying that market was up. The extra tourists appear to have come from Germany and mainland Europe, apart from France.
In terms of attractions, just over one in three (37pc) had more visitors this summer, while 54pc said they had fewer. A decline in the domestic market is being blamed. Profitability was also under pressure: 43pc said it was down, and 31pc reported it up.
Self-catering was the only accommodation sector to report more guests this summer. Just over one in three (36pc) reported an increase, while 25pc had fewer. Overseas visitors are credited for the uplift, with France and North America performing well.
While there was concern over costs, the main worry for self-catering operators is of Irish holidaymakers going overseas, cited by 59pc.