Belfast Telegraph

Monday 22 September 2014

Hospitality sector gets lift but room for improvement

We estimate that spending in hotels in 2012 totalled £315m net of VAT.

This is a significant sum of money for one sector within the local tourism industry and since most purchases will be local, the hotel sector is really important to the local economy.

For instance, staff costs alone were in the order of £106m in 2012.

However, a combination of increasing costs and difficult trading in operations other than bedroom sales means that the increase in profitability is not as high as the uplift in the demand for bedrooms may suggest.

Nonetheless, any improvement in profitability is to be welcomed.

Without doubt, the 2012 campaign has made a very important contribution to tourism and has proven that high-quality events and world-class attractions are a major attraction for visitors. Its impact is especially important since ongoing economic pressures have adversely affected tourism in other countries and business tourism in general remains depressed.

Let's not forget that compared to the industry in the south of Ireland, local hoteliers must account for VAT at 20% (9% in Ireland), that we are subject to high air passenger duty on most flights and business taxes are higher.

All of these factors put us at a disadvantage compared to hotels in the Republic.

Thankfully we have a minister who is enthusiastic about tourism and hotel owners that are passionate about their industry.

Events of international standing have now become part of our armoury to grow the industry and Derry/Londonderry as UK City of Culture 2013, the G8 Summit in Fermanagh and the World Police and Fire Games in August should all deliver new visitors in 2013 and help to further boost our profile.

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