2011 is proving to be a hugely difficult year for the Irish Hotel sector, as the very latest industry survey reveals. The research has shown that around one hotel a week will go ‘bust’ during this year, which is a shocking statistic and an unfortunate reminder of the challenging economic times that we currently live in.
The hotel survey of 2011 has shown that over 10% of Irish hotels are currently in receivership, with one going into bank ownership every week, with an estimated 50 hotels predicted to go bust by the end of the year.
Despite the fact that Irish hotels are the cheapest in Western Europe, offering great Value Breaks for the price conscious tourist, many hotels are finding it increasingly difficult to make ends meet, with over 20 being taken over by the banks in the first 5 months of this year alone. Considering that 30 properties went into the hands of the receiver during the full year 2010, the estimates for 2011 are indeed very worrying for the sector.
65 hotels in Ireland are currently in a state of receivership, with nearly 40 hotels located in Dublin and the east of the country alone. Approximately 20 are in the west of Ireland and seven located in the Ulster counties of the Republic. Only a small few of these hotels have actually closed their doors. While officially they are struggling to make ends meet and are in the hands of a receiver, they are being kept running by the banks, and offer very low room rates until the time that they are sold off when the market picks up again.
Such hotels are known as ‘Zombie’ properties and their presence may hamper the efforts of hoteliers who are in business for several years and who are unable to compete with the very low rates on offer in such repossessed hotels.
On the plus side, the hotel survey has stated that the hotel industry looks set to improve and recover, due to the welcome service VAT reductions by the Irish coalition government and the removal of the air travel tax.
The message to consumers is clear - make sure to shop around for the best in hotel value!
What are your thoughts on the hotel industry survey? Do you have Irish hotel experiences to share with your fellow readers? Please let us know.
