Following a year of strong tourism growth, hotels and guesthouses in Galway are upbeat going into 2016, according to the latest quarterly barometer from the Irish Hotels Federation (IHF ). Local hoteliers have benefitted from a 13 per cent increase in overseas visitors to Ireland over the last 12 months, including significant growth key markets such as North America (visitors up 13 per cent ), Britain (up 11 per cent ) and the rest of Europe (up 14 per cent ).
Some 92 per cent of hotels and guesthouses now report a positive outlook for the next 12 months, with a similar number (90 per cent ) saying business levels are up on last year. Domestic tourism and hospitality business is also performing well, although from a low base following years of subdued consumer confidence. Some 85 per cent of hoteliers report increased business this year from the home market, with people taking more trips at home and spending more money in the local economy. This is important for the sector given demand from the island of Ireland accounts for the majority of all hotel bednights (69 per cent ).
In the run up to Christmas, growing consumer confidence and recovery in the domestic economy has been clearly evident on the ground. Of those hotels targeting Christmas functions, some 70 per cent report that bookings for parties and events are up on last year. The increase is being seen right across the board, reflecting the widespread optimism among businesses nationally as they seek to recognise the contribution made by their staff during the year.
Shay Livingstone, Chair of the Galway Branch of the IHF states that confidence among hoteliers continues to improve as the recovery in tourism strengthens. This has been supported by highly effective marketing campaigns targeting key overseas markets and a number of pro-tourism initiatives by the Government such as the nine per cent VAT rate and the zero rate travel tax. He cautions however, that issues around cost competitiveness need to be addressed and that the increasing cost of doing business in Ireland poses a serious challenge to tourism as the recovery in the economy takes hold.
The upturn is contributing to significant jobs growth with 64 per cent of hotels and guesthouses having increased staffing levels this year and 57 per cent planning to take on further staff over the next 12 months. This builds on the 33,000 new jobs created by Irish tourism and hospitality businesses since 2011 – accounting for more than one of every three new jobs in Ireland over this period. Tourism now supports 15,000 jobs in Galway and contributes some €506m to the local economy annually. Nationally, tourism supports over 205,000 jobs, with demand for an additional 40,000 forecast over by the end of the decade.
Mr Livingstone says: “Irish tourism has performed strongly throughout the year and we’re now approaching a record-breaking eight million overseas visitors for 2015. This is an enormous achievement and a testament to the hard work of the thousands of tourism businesses throughout the country. Next year looks set to deliver further growth across our key markets such as Britain, North America and Europe - providing a further boost to the local tourism sector here in Galway.”
The improved outlook for the tourism and hospitality sector means that hotel and guesthouse owners across the country are now in a stronger position to invest in their business, with results showing that 92 per cent of hoteliers are planning to invest in refurbishment and product development over the next 12 months while 62 per cent are planning to increase their investment in marketing.
Mr Livingstone states that strong cut-through on the marketing front has reinvigorated Ireland’s tourism brand and image as a holiday destination. He says: “Tremendous strides have been made on the tourism front in recent years, with targeted programmes from Fáilte Ireland and Tourism Ireland giving holidaymakers new and compelling reasons to visit our shores.”
“An example of this is the Wild Atlantic Way, which has been fantastic in re-energising regional tourism, providing a very welcome boost to Galway’s local economy. It’s vital that we continue to invest in developing and marketing this initiative to fully exploit its potential.”
Business tourism in Galway is also an area of growth, supported by increased activity in the domestic economy. Of those hotels catering for corporate meetings and business events, 71 per cent are seeing an increase in this area of their business compared with last year.
Mr Livingstone cautions, however, that growth in hotel revenues in Galway is from a low revenue base following the downturn. He says that many hotels and guesthouses continue to face challenging conditions and are still a number of years away from achieving sustainability. In particular, Mr Livingstone points to the high cost of doing business in Ireland, which is stifling competitiveness with hoteliers facing excessive local authority rates, increasing labour costs and high utility costs.