Belfast Telegraph

'Challenging' start to 2019 for Northern Ireland hotels after major expansion

Attending the recent NI Hotels Federation seminar were (from left) host Mark Simpson, Sarah Duignan from STR Global, NIHF CEO Janice Gault, and Andrew Webb of Grant Thornton
Attending the recent NI Hotels Federation seminar were (from left) host Mark Simpson, Sarah Duignan from STR Global, NIHF CEO Janice Gault, and Andrew Webb of Grant Thornton
Margaret Canning

By Margaret Canning

Fears over the "political circus" of Brexit have contributed to a challenging start to the year for hotels, it's been claimed.

The Northern Ireland Hotels Federation said that expansion of the hotel sector in 2017 and 2018, including nine new venues, had required a period of readjustment.

In total, it claimed there will have been investment of £600m in hotels here from 2016 to 2019.

But it staffing problems exacerbated by Brexit could hold the sector back.

There are now 142 hotels in Northern Ireland, providing 9,302 hotel rooms.

But including guest houses, self-catering and campus accommodation - which the federation counts as it can also compete for visitor business - there are a total of 21,142 rooms.

In Belfast, new hotel openings since 2016 have increased room numbers by 44%.

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But the federation said that there had also been growth in guest house accommodation and self-catering - mostly on the north coast as it prepares for The Open golf championship in July.

And while demand had grown in all regions, it had been outstripped by a 19% increase in supply over two years.

The federation said that expansion had created challenging conditions in the first few months of 2019, but that trade had "rallied" in April.

Chief executive Janice Gault said: "The sector has come to the end of a substantial expansion phase. Other accommodation provision has also grown and this may continue, thus creating more competition for hotels.

"New supply has created challenges around room rate, staffing and occupancy.

"However, it is important to note that demand has increased by 4.3% year to date and this is well ahead of last year.

"This is a strong message for us all as demand drives confidence which harnesses growth and investment."

Ms Gault warned that hospitality had also been hit by a dip in consumer confidence.

"Government uncertainty on a local level and the political circus of Brexit has resulted in a wariness about spending which has been evident in quarter one figures," she said.

"The market, particularly in Belfast, has seen considerable change and is experiencing a period of readjustment."

The chief executive predicted there would be 10,000 rooms in Northern Ireland by 2020.

The federation said there were 14 'live' hotel projects at present, including the planned opening of the Haslem Hotel in Lisburn, which is due to add 52 rooms this year.

A new Premier Inn in Bangor, Co Down, would add 85 new rooms, while Andras House's scheme at the former Londonderry Arms in Portrush would add 87 rooms.

And in the longer term there is the prospect of 23 hotels opening, including proposals for a hotel at Fanum House on the Dublin Road in Belfast.

Ms Gault said that it was "amazing to see 50 other projects in varying stages of concept, planning and development".

"Hotel investment from 2016 to the end of 2019 will be in the region of £600m," she said.

"This presents massive opportunities. A well invested hotel stock allows the region to bid for and attract large events.

"It also creates a good impression for visitors, helping to raise Northern Ireland's appeal as a destination. There is no doubt that the massive influx of product in 2018 has presented issues but these will be tempered as the market grows.

"There are two major challenges for the industry. Firstly, staffing across all levels needs to be addressed. The situation has been exacerbated by Brexit and it may prevent the sector from reaching its true potential or growing to greater levels.

"Secondly, there is the issue of promotion. As an industry we need government to support us.

"An increase in marketing spend is required to improve awareness of Northern Ireland, attract more visitors and build upon the significant investments that the private sector has made."

Belfast Telegraph