When I look at the hotels in Northern Ireland, I see a real success story, with business leaders who have shown resilience, tenacity and who have much to be proud of.
Over the last 25 years our hotel sector has doubled in size, supporting 15,000 jobs with a payroll exceeding £350 million. The numbers tell a tale of growth, with 2023 witnessing the sale of approximately 2.5 million rooms and a total turnover of around £800 million.
Investment has been key to the sector’s success with over £1.5bn spent since 1999. This has resulted in accommodation stock of a high standard with 75% of the region’s 9,646 bedrooms under 15 years old and 67% rated three-star and above.
But this success is not without its twists and turns. Constructing a hotel is a prolonged and often arduous journey. On the positive side, the substantial financial commitment required ensures hotels are not short-term assets, fostering sustainable economic and social benefits that transform destinations.
Hotels are integral parts of a complex tourism ecosystem. They provide a place for visitors to stay and local communities to meet, with the bonus of supporting a myriad of local businesses along the way.
The good news is that this sector has room to expand further, providing regional balance and long-term jobs throughout Northern Ireland. With 143 hotels and 9,646 rooms currently, hoteliers are adapting, diversifying their offerings, and pivoting to address market needs.
They have responded by adding new products including independent lodges, alongside the traditional hotel bedroom, shepherd huts, suites, and apartments. Many have added additional eateries, developed outside spaces, and collaborated with experienced providers to enhance the guest’s stay.
I don’t want to cause alarm but there are about 70 projects, many of which are not in the public domain, looking at a hotel or an accommodation offering as part of future development.
The pipeline has stuttered along but remains stagnated. Getting to break ground can take a decade, and raising funds involves a lot of blood, sweat and undoubtedly tears.
However, tenacity is a core skill for the prospective hotelier, a skill well-honed by those who have traded over the last two decades. It’s no surprise to learn that most new properties that have opened since 1999 are owned and operated by those already trading in the region. The challenges of construction have made acquiring a hotel a much more attractive option than building one and a considerably cheaper option.
Looking ahead, I envision a future where creativity and conceptuality thrive, but predicting actual growth poses challenges. While 2023 saw two new hotels open - The Ebrington Hotel in Derry and Room2 Belfast hometel - adding 266 rooms with a 2% growth rate, the outlook for 2024 and beyond remains unclear.
In the current year, there will be a couple of small openings and expansions adding around another 200 bedrooms. But it is a very blurred line once you come to the end of 2024 and investigate 2025.
More than 10 projects have been granted final planning but could take two to three years to build. Delays due to planning requirements, supply chain issues, and financing challenges are evident. Expansion might not necessarily translate into traditional hotel products; acquisitions and major refurbishments will play a pivotal role in reshaping and renewing the sector.
This activity, even at a modest level, would see a further investment of £300m by 2027. The hotel, hospitality, and wider tourism sector have significantly contributed to the local economy and should be recognised as a major player in Northern Ireland’s future economic success.
Much of this will be discussed at the NI Hotels Federation’s Business Outlook event on March 20 at the Clandeboye Lodge Hotel.
Hosted by journalist Mark Simpson, the event will delve into opportunities, challenges, and the reinvigorated hotel pipeline. Discussions will encompass financial support, data analysis from benchmarking firm STR, and the unveiling of an all-island sustainability scheme.
The event is a must-attend for general managers, hotel sales, marketing, and revenue managers, as well as those seeking a better understanding of the current market.
And when you book your spot online at nihf.co.uk you will receive a free report on hotel investment, growth, and trends.
- Janice Gault is chief executive of the Northern Ireland Hotels Federation