Wednesday 23 January 2019

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Cork Independent

Business & Professional

Cork hotels bracing for Brexit storm

Wednesday, 2nd January, 2019 4:53pm

Business sentiment among hotels in Cork and across the country has dropped significantly despite another year of growth in 2018, according to the latest hotel barometer from the Irish Hotels Federation (IHF).

Less than half of hotels (49 per cent) nationally now report a positive outlook for the next 12 months, compared with the 82 per cent who had a positive outlook in late 2017.

Key concerns for the sector include the escalating risk and uncertainty around Brexit, reduced visitors numbers from the UK and the increasing costs of doing business.

While 73 per cent of hotels saw some increase in overall business levels in 2018, growth from North America and Europe has masked the poor performance of the UK market, with visitors still down five per cent on 2016 due to persistently weak performance following the referendum. This is having a direct impact on hotels throughout the country, with 52 per cent reporting a drop in business from Great Britain in 2018, while 40 per cent have seen a drop in business from Northern Ireland.

The vast majority of hotels (91 per cent) now express concern about the impact of Brexit on their business over the next 12 months.

Neil Grant, Chair of the IHF’s Cork branch, said: “With the Brexit storm gathering, relentless increases in the cost of doing business, international trade wars, a slowdown in European growth and the increase in tourism VAT, there is little surprise in the drop in business sentiment. Many of our members are now re-examining their future investment strategies and taking a more cautious approach to planning for the next year and beyond.”

Tourism currently supports 25,300 jobs in Cork and contributes some €855m to the local economy annually.

“The Government must mitigate Brexit related risks to tourism and facilitate the continued growth of an industry that supports approximately 266,000 jobs, over 70 per cent of which are outside Dublin,” Mr Grant continued. “There are aspects of the economic environment and Brexit that are largely outside our control, but it is imperative that we mitigate the risks and potential damage where we do have some control over our destiny.”

Mr Grant called on the Government to introduce a tourism satellite account (TSA) within the Central Statistics Office (CSO) to provide a full analysis of the economic activity in the tourism industry and how much it contributes to each county, including Cork. A TSA is a standard statistical framework and the main tool for the economic measurement of tourism.

On a brighter note, Christmas events and parties remain a significant part of the business for more than half of the hoteliers surveyed (52 per cent). Of those, almost half (47 per cent) reported an increase in business during the 2018 Christmas period compared to 2017, with over a third (36 per cent) of those surveyed taking on additional staff for the period.

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