Increase in tourists raises Irish hotel profits by 30%

Published on : Wednesday, August 31, 2016

Ireland hotelsAn increased number of tourists, absence of pay rises in the hotel sector, thriving domestic market and reasonable room rates have been pushing up profits in Irish hotels, as declared by a new study.

 

Crowe Horwath, an advisory firm has come up with its 21st annual hotel industry survey and it is based on the figures of 2015. According to this survey, the profits in every hotel room in this area had risen by 30% through the country.

 

The higher occupancy rates along with the presence of a large number of luxury accommodations in the city have enabled Dublin hotels to earn maximum profits. On an average, they earn about €16,913 for every room this year, while last year the earning was about €13,797.

 

The hotel rooms that are present in western and southwest seaboards are capable of earning over €8,000 in profits.

 

However, the sharpest escalation in profits have been witnessed by the hotels in east and Midlands areas of Ireland except Dublin amounting up to over 40% to €10,628. The rising profits is attributed to a strong growth on non-accommodation revenues for the hotels that include banqueting and food, said Crowe Horwath.

 

The fact that Irish hotels are raising the rates to increase profits is sparking a debate if the government should adhere to its special VAT of 9% in the upcoming budget.

 

This VAT had been then introduced in the period of recession to make the then-decelerating sector flourish. Hoteliers have said that the government should make it a point to retain the VAT in order to keep the prices competitive.

 

As per the study of Crowe Horwath, the standard industry revenue per available room was €65.52 on a national basis in 2015.

 

Crowe Horwath’s partner, Aiden Murphy said that the demand for hotel rooms have reached optimum levels, similar to the situation prior to the recession period. He also said that the average hotel room rates continues to be a bit below that of 2006 when the rates exceeded €120. However, in 2016, the rates would be surpassed.

 

He said that more supply is required for the Dublin market.

 

Mr. Murphy said that in March, the hotel rates in Dublin were €102, when the occupancy rate was 75%. And, in the peak season of September, the rates in Dublin was €123 while the occupancy was 92%. He then said that the current scenario suggests that the increase in supply might witness a drop in rates by 20%.

 

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