With the publication of the Ulster Business Top 100 Companies 2020 list, Janice Gault, chief executive of the Northern Ireland Hotels Federation (NIHF) looks at the hotel and hospitality sector as it begins to reopen and what’s in store for a sector undergoing an evolution
Over the last decade tourism has grown considerably with the sector tipping the one-billion-pound mark in 2019. Indeed, a number of firms relating to the hospitality sector feature in the Ulster Business Top 100.
In normal circumstances, commentary would have been about the significant £600m investment the hotel sector had made, new projects for 2020 and the next phase for the industry. The sector had begun to feature heavily in economic outlooks and was gaining recognition as a job rich sector, driving the local economy forward. The forecast for 2020 was that it would be a year of uncertainty with considerable challenges. The general consensus was that growth would be minimal given the constraints that were emerging, and it would be a year of consolidation, rather than one of expansion.
In January, after a bruising election, the issue of Brexit was taking centre stage. As we move through 2020, it’s a very different tale to tell. Brexit, while still on the horizon, has faded into the background though its impact on the local economy is unlikely to be positive.
Coronavirus, the lockdown and the closure of tourism is the sad story being repeated around the world. The pandemic swept through Asia into Europe and on to America leaving a trail of destruction. Tourism and hospitality were left reeling in its wake with the industry going into lockdown.
Hotel businesses in Northern Ireland were ordered to close on March 25 having staggered through a very difficult couple of weeks. After fourteen weeks in hibernation the hotel sector in Northern Ireland returned to trading on the July 3, 2020. About 50% of Northern Ireland’s hotels opened their doors on the first weekend and current reports suggest that the majority of hotels will re-open by autumn.
These are tentative steps and there are strict conditions in place which in the short term will make trading difficult. Hopefully, as the threat of Covid-19 subsides, these will be relaxed, and we can return to a more normal situation.
Closure for the hospitality sector was swift. Support over the course of lockdown in the form of the Coronavirus Job Retention Scheme and a rates holiday was widely welcomed. It’s been an emotional journey, from dread to despair, and a well-documented fight to re-open.
There have been many challenges to get to this point and there will be issues ahead. The industry has shown ingenuity and tenacity since March, approaching the reopening phase in a responsible and determined manner. As unlocking continues, the need for additional support is becoming apparent. Hotels will be trading for the foreseeable further with limited income streams, additional costs, and a reduced customer base. Business viability is of concern and is likely to a major agenda item for the sector in the coming year.
Many questions surround the ‘new normal’ for the hotel industry and while I’m not sure that there is a collective noun for an ever-ending series of questions, perhaps an inquisition or even an interrogation, questions certainly abound. The sector is emerging slowly from an unprecedented situation.
As an industry we see the hotel occupying a unique role in society, offering respite and relaxation, as well as helping to restore the local economy. Hotels have been working hard to ensure that their proposition is a hospitality experience and not reminiscent of a “hospital’ environment. This a balancing act, trying to strike a happy medium, between creating and showing that a hotel property is a safe and sanitised environment. Delivering a relaxing stay is quite the feat.
To date, the ‘new’ hotel experience looks very like what it was before, albeit with some face masks apparent, increased evidence of cleaning and some changes to the flow of guests through the building.
The hope is that the ‘après’ lockdown night away will prove popular and customers will appreciate being able to enjoy dinner out or an evening away. From personal experience, I found it a little emotional, somewhere between seeing an old friend after a very long time and heading out on a first date.
Given the constraints on travel and possible quarantine control, so-called ‘staycations’ appear to be the name of the game for 2020. The success of the ‘staycation’ will be to make sure the guest feels that going local is a choice and not an option that has been foisted upon them. It needs to be a great experience and one which hopefully affords us the opportunity to build trade in the coming year. In 2019, the domestic spend in Northern Ireland from inhabitants of the region was in or around £300m with locals spending £888m on trips abroad. In the short term, if we can convert even a small portion of this international spend to local breaks, it would be a great result.
However, it is important to note that we have a considerable piece of work to do in converting the local guest’s psyche. A sustainable outcome would be that a ‘staycation’ becomes part of the domestic holiday pattern which builds in coming years. The hope would be that we can encourage the domestic tourist to embark on a long-term relationship with the local hotel sector and not see it as a one-year wonder.
In the medium to long term, as the risk of Covid-19 subsides, the aim would be to attract international business once again. This will improve business viability and restore trading to growth mode. Forecasting or creating detailed plans is not a worthwhile exercise at present as there are simply too many variables.
Hotels represent a considerable capital investment and are committed to the local community, both financially and on a socio-economic basis. The sector has shown a resilience in the past which will hopefully stand it in good stead. No doubt there will be twists and turns on the road to recovery but hoteliers are at the start of a new era and will continue to make the best of the situation.