'Unprecedented' Belfast growth creates record demand for hotel rooms
THE demand for hotel bedrooms in Northern Ireland has reached record levels according to the latest industry figures.
The 2016 annual hotel industry survey from ASM Chartered Accountants shows a record high occupancy rate of 77.9 per cent across the north - a slight increase on the previous year (77.5 per cent).
The figures further reveal another strong year for Belfast, with a new high occupancy rate of 83.5 per cent as well as a rise in room rates and profits. Similarly, rural and resort/spa hotels recorded success with increased revenues and profits.
In Derry city however, while demand for bedrooms increased (67 per cent), income in other areas of operations declined. In tandem with increased operating costs, profits declined during 2016.
The average room rate, which is the price a guest pays for a room excluding VAT, increased by 4.1 per cent to £77.95, while total revenues per room, which includes income from all hotel activities, increased by 15.7 per cent to £53,363 in 2016. This means that there was revenue growth in all areas of hotel operations. This uplift in revenues boosted profits (before rent, interest, depreciation, amortisation and tax) by 17.7 per cent to an an average of £10,816 per room.
Director of consulting at ASM Michael Williamson said 2016 was an "outstanding year" for hotels in Northern Ireland.
"Without doubt, the almost instant decline in the value of sterling on the back of the EU referendum result in June 2016 boosted our competitiveness as a destination and in Belfast especially this made a tangible difference to the demand for accommodation in the second half of the year," he said.
|"But it would wrong to credit all of the progress achieved in 2016 to the exchange rate movement. There was already underlying growth in many areas outside of the capital city, while in Belfast, the opening of the extended Waterfront Hall has massively improved its appeal to the meetings, conventions and exhibitions segments – a very important and high spending tourism market that we expect to add materially to the demand for accommodation in future years."
In Belfast alone, there are around 1,100 new hotel bedrooms currently under development with the prospect of further development within the next two years.
Mr Williamson described the level of Belfast development as "unprecedented" and added that it was difficult to see how the demand can grow in the short-term.
"I fully expect there to be some decline in average bedroom occupancy rates from 2018 onwards. But let's remember that we are coming off a very high occupancy rate, so the impact may not be severe as that experienced during the last wave of development in 2009 and 2010," he added.