Business

Hotels seek clarity as average hotel room rate slumps to paltry £26.63

The north's hotels sector remains in a precarious position, according to the NIHF
Gary McDonald Business Editor

THE current six-week Covid circuit breaker has cost hotels in Northern Ireland more than £10 million in salary furlough contributions and fixed costs, which could tip many businesses over the edge.

Occupancy levels have plummeted in some areas to less than 20 per cent and the average room rate for this year will be a meagre £26.63.

Industry heads claim the accommodation sector is "running on empty" and insist it must urgently be supported "in an appropriate manner based on room numbers and business levels".

And against this precarious backdrop of empty bedrooms and depleted reserves, turmoil around the unlocking of the hotels sector rumbles on, with still no clarity on re-opening, what it will look like, or if any additional safety measures will be required.

"We really are in a dire position as hoteliers continue to count the growing cost of closure, with no agreed government strategy on the way forward,” according to Janice Gault, chief executive of the NI Hotels Federation (NIHF).

Fresh figures from the international benchmarking company STR show that occupancy across Northern Ireland fell to 23 per cent in October, with levels in Belfast and Derry dipping below 20 per cent.

Revenue achieved per available room fell from £57.55 in 2019 to a paltry £26.63, with total revenue for the year predicted to plunge to £77m from close to £200m last year.

“For the hotel sector to emerge from this pandemic and be in any sort of position to contribute to our society, it needs urgent support," Ms Gault added.

“The current circuit breaker has cost hotels £10 million-plus in salary furlough contributions and fixed costs, which doesn't even take account of rent, loans, interest or mortgage payments, and so far the only support they've received is a scheme which is capped at £9,600.

“Hotels are complex business operations which require forward planning to enable bookings to be made, staff engaged and orders placed with suppliers.

“Guests have been understanding and have coped well with the inconvenience - but the mood is changing.”

Enjoy reading the Irish News?

Subscribe now to get full access

Business