Belfast Telegraph

Hotel occupancy levels fall 5% in Belfast following two years of strong growth, says survey

By Margaret Canning

Hotel occupancy levels in Belfast have fallen 5% over the last 12 months as the number of places to stay in the city rises even further, a survey claims today.

The research by business advisors PwC said the city's hotels had enjoyed a bumper June - but over the year had slipped down the league table for hotel occupancy in UK cities.

PwC pointed to business confidence taking a knock in the run-up to the EU referendum - translating into companies reducing their budgets for events and travel.

The firm's research showed that average occupancy levels in Belfast's hotels fell from 79% to 74% in the 12 months to June 2016.

That was second only to Aberdeen, where occupancy levels fell by 10% as the Scottish city's prosperity - heavily dependent on North Sea oil - took a battering from falling oil prices.

Belfast's fall follows a strong performance over the two previous years, when average occupancy for the city's hotels outpaced the UK as a whole to grow from 75% to 79%.

PwC's survey comes as around 22 new hotels are planned for the city - with new arrivals including Hastings Hotels' Grand Central on Bedford Street (pictured).

Martin O'Hanlon, partner at PwC Northern Ireland, said: "Uncertainty and lower confidence pre and post the EU referendum, as well as a slowdown in economic recovery, have impacted corporate budgets and travel, a vital segment for hotels."

He said new hotel rooms were becoming available "which have outpaced demand".

The growing supply of rooms was now reflected both in falling occupancy and in falling RevPar (total room revenue divided by number of rooms).

RevPar in the 12 months to June 2016 was down 4.6% to £46.50 from £50.80 a year earlier.

And occupancy in Belfast fell at a far steeper rate than the UK as a whole, where occupancy fell by just 1%. But PwC added that there were seasonal factors at play, with hotels in the city enjoying occupancy levels of 90% during June, compared to a UK average of 82%.

And hotels during the month also enjoyed a higher average daily room rate of £73.33, which was up 5.4% on the year before. Its year-on-year increase was also higher than other cities.

Mr O'Hanlon said 2017 could reverse the trend seen over the last 12 months.

He said: "The expansion of the Waterfront Hall offers significantly greater appeal for the conference market, while other attractions like Titanic Belfast has gained international appeal."

Mr O'Hanlon added: "Weaker sterling may bring some short-term benefits to leisure tourism and security fears around European and other destinations may also result in more staycations across the UK and Ireland."

Janice Gault, chief executive of the Northern Ireland Hotels Federation, said: "These statistics highlight the seasonality of Belfast as a destination and a very poor start to 2016.

"The factors behind this are many including the Waterfront being refurbished, a limited number of conferences and events.

"Over the summer the city has picked up with a record August reported and we envisage that the August figures will put the city close to the 2015 annual performance.

"However, it is important to note the challenges the sector faced over the winter months and reflect on the effect that the planned significant increase in hotel stock may bring."

Belfast Telegraph