Hotel performance: Strong Staycations uptake improve chances of survival

The latest hotel figures for Northern Ireland show a significant improvement from the July position. Hotels in Northern Ireland were permitted to re-open on the 3rd July 2020 with over 85% of the market now trading. Occupancy figures for August give an overall occupancy figure of 56.9% with an average room rate (ADR) of £82.00. Occupancy in July was 24.8% with an ADR of £78.13.

Janice Gault, CEO of the Northern Ireland Hotels Federation, says:

“Without a doubt, there was a certain amount of trepidation about opening with concerns about safe trading, the viability of the market and a question mark over sustainability. However, as the summer has progressed, things have settled down with more hotel rooms coming on stream and ‘staycations’ increasing. Domestic trade has been strong with rural destinations such as Fermanagh, the North Coast and the Mournes proving very popular. This trend extends beyond hotels with other accommodation providers, in particular self-catering, reporting a very good August.”

Highlighting the August position, Janice continues:

“An influx of visitors from the South of Ireland has been a great boost to tourism and hotels have certainly benefited. Bookings increased three-fold in August 2020 compared to the same month last year. September has shown a similar pattern with almost double the number of bookings seen in 2019. Hotels are making the best of the season and are continuing to avail of furlough and other supports to improve their chances of survival.

“All things considered; August is a good news story. However, if we look at the year to date figures, the scale of the crisis becomes apparent. Occupancy in 2020 year to date is 37%, in the same period in 2019, it was 72.6%. Overall revenue is down by 63%. Forecasting the 2020 performance would be impossible to do in any meaningful manner but as long as the sector remains open and hotels have an opportunity to trade, there remains an element of hope. Recent measures introduced in the Republic of Ireland and in council areas in Northern Ireland are of real concern. The sector is keen to trade responsibly but uncertainty about regulations and travel dent consumer confidence and will undoubtably have a significant impact on trading in the coming weeks.”

“As a sector we are trying to maintain a business as normal approach.  Our annual Hospitality Exchange event, which provides a forum for hospitality providers to share information and discuss challenges, will be taking place on 14th October 2020.  A change in format will see Hospitality Exchange, The Summit 2020, take place online.   We have a range of experts lined up, from the Minister for Department for the Economy, to representatives from Tourism Northern Ireland and Tourism Ireland, who will be outlining the activity that they have planned for the next twelve months. For further information log on to hospitalityexchange.org.uk.”

NIHF

Explaining the ongoing challenges and the need for continued support to ensure hospitality businesses can survive Janice says:

“The measures that hoteliers have introduced to keep customers and staff safe has meant some properties are operating a shorter week to adhere to social distancing, while others have had to reduce occupancy levels.  Businesses are also having to absorb the associated cost that comes with implementing the extensive health and safety measures that must be adhered to.  If you look at year to date occupancy figures they show the stark reality of the impact of COVID-19, a staggering 50% drop in occupancy compared with last year.

“In 2019, tourism spend was in the region of £1bn and the industry consensus is that in 2020 spend will not reach half of last year’s total.  Furlough support which has been vital to local hoteliers comes to an end on 31st October and this is very much seen as a cliff edge for the industry. It is hoped that targeted support can be given to the tourism sector by the Treasury on a national basis and that additional measures will be explored by the Northern Ireland Executive. Hoteliers would like to see the reduction of VAT to 5% VAT remain and also a reduction in business rates for the coming year announced with support for staff over the winter.”

Janice concludes: “Hoteliers have demonstrated their commitment to Northern Ireland having sustained thousands of jobs and invested around £600m over the last five years alone.  The industry is open, and hoteliers are trading and are keen to contribute to the economy in a positive way.”

Exchange 2020 – Main Programme

Love Belfast
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