Belfast Telegraph

Gloom for Northern Ireland hotels as occupancy rates fall

By Margaret Canning

Northern Ireland’s hotels will have to cut costs to survive as falling tourist and business numbers spell disaster for the sector, experts have warned.

Rates of occupancy in Northern Ireland’s hotels were down to 50% in November, the lowest since 2002, according to Northern Ireland Tourist Board figures.

Hotels are responding to the fall in demand — staff at the Stormont Hotel in east Belfast, part of the Hastings chain, are being consulted on cost-cutting measures.

Meanwhile, Belfast’s five-star Merchant Hotel has launched a room sale for next month.

Stormont general manager Gerry Carty said that the hotel was looking for ways to keep costs down.

“Therefore, last Friday the Stormont Hotel held a meeting with all staff of the hotel to consult with them and ask them to suggest ways in which the hotel can economise in 2010. The staff are currently looking at suggestions. There has been no decision made just yet.”

Michael Williamson, a director of accountancy firm ASM Horwath and an expert in the sector, said the market had slowed down in Belfast — and the recession was part of the problem. “We were very successful in attracting conferences, with 2007 a golden year, but that industry goes in cycles. And perhaps some of our pricing structures did encourage people to go to other destinations. But we are not a mature market, we are having some growing pains and a little bit of learning to do.”

He estimated that hotels takings could have fallen by up to 25% as they attempt to improve occupancy levels by reducing room rates. But Janice Gault, chief executive of the Northern Ireland Hotel Federation, said while trading was difficult, times had been tougher before.

“The nature of the business means that hotels are a long-term investment involving extensive capital utilisation and therefore returns are calculated over a longer timescale.

“The hotel business is a resilient one and whilst current trading is difficult, it is a case of battening down the hatches, keeping a close watch on costs and promoting the province to encourage visitors in the future.”

John McKenna, food and travel writer and Bridgestone Guide writer, said the latest occupancy figures were “disastrous”, particularly for smaller operators.

“What happens is people start to cut their rates. You get this race to the bottom, which is just incredibly problematic. People will do anything they can to fill their rooms.”

Petra Wolsey, marketing manager of the Merchant Hotel, said it had not suffered unduly in the recession.

“We have been mindful of the economic climate and have created some fantastic ongoing deals but the current offer is purely seasonal and we have been doing it for three years. It’s a way for people to cheer themselves up.”

Belfast Telegraph