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£1bn investment has transformed Northern Ireland hotel market, report says



The Galgorm Hotel, which recently won a prestigious international award

The Galgorm Hotel, which recently won a prestigious international award

The Slieve Donard

The Slieve Donard


The Galgorm Hotel, which recently won a prestigious international award

Over £1bn has been invested in the Northern Ireland hotel market in the last 20 years, with the number of bedrooms doubling in that time, says a report today.

The Northern Ireland Hotels Federation (NIHF) launches its research on hotel development since 1999 at the Hospitality Exchange 2019 conference today.

Over the last two decades, the number of four-star hotel rooms has more than tripled, with the upper end of the market now dominating the sector, the NIHF said.

That growth has led to the phasing out of one and-two star venues.

Since 1999 a number of now famous hotels have been added, including Belfast's Merchant Hotel and Fitzwilliam.

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New operators have arrived, including Merchant owner Beannchor, while other established names such as Hastings have continued to thrive.

There are now 145 hotels here and in the last three years room numbers have increased by 1,900 to 9,548 rooms, with the majority of the new rooms in Belfast.

Today the hotels sector supports around 15,000 jobs, according to the report, which was carried out using information from business advisory firm ASM and industry body STR.

Janice Gault, the chief executive of the federation, said: "The hotel landscape has altered dramatically and it's only when you look back to 1999 that you realise the seismic changes that have occurred.

"Hotels have invested heavily with new builds, extensions and refurbishments. As a result, the entire market has moved up the grading scale with a total investment in the region of £1bn.

"The four-star market has really grown and budget hotels are now just 16% of the overall room stock. The one and two-star sector is more or less defunct."

In 1999 the average hotel had 36 rooms. Now, it has 66 rooms. The average occupancy in 1999 was 58%, with an average room rate of £49.46.

There were just over one million hotel rooms sold in the year, producing room revenue of £50m.

In 2000 changes began in the market, with the number of hotels beginning to reduce, small establishments closing and larger establishments being built, usually in urban areas.

A period of huge expansion took place between 2005 and 2008 and two new five-star properties were added.

The market shifted up a gear as four-star and independent operators tried to differentiate themselves.

Occupancy reached a peak in 2007 at 72.9% and visitor numbers broke the two million barrier. In 2008 the room rate reached a record high of £70.58. However, the global downturn had a devastating effect on the hotel industry and occupancy and rates fell for a record of 38 months through to 2012.

Ms Gault said: "There have been some pressures in the market, but it is important to note that in Belfast, where most of the expansion has occurred, demand in the year to date is running at plus 8.3%. Overall, room sales are up year on year, with forecasts indicating that 2.5m hotel rooms will be sold in Northern Ireland in 2019."

But she said Brexit "looms over the UK", with the economy here in a vulnerable position.

"People are holding back on bookings. The Republic of Ireland market, which has grown considerably over the last number of years, is of particular concern," she said.

"Hotels are resilient by their very nature and continue to show real commitment to the Northern Ireland economy."