Posted on Wednesday 17 October 2018 by Ulster Business
Northern Ireland hotels need more promotion if demand is to keep up with a rise in supply as a "stormy" year beckons, writes Margaret Canning.
The Northern Ireland Hotels Federation said a "shudder" was going through the industry, which comprises 141 hotels and 9,177 bedrooms.
In Belfast, 1,170 rooms were added over the past year, thanks to new construction of six new venues, including the Hampton by Hilton and the Grand Central, and extensions to two existing hotels.
The federation said the market was going through a "stutter" with occupancy and room rates going down.
"It is important to note that demand for hotel rooms has grown over the last year, but it hasn't kept pace with the increase in supply," it added.
A separate report by PwC put the cost of an overnight stay in a Belfast hotel at £80.
The federation predicted a significant fall in demand next year and 2020, with demand unlikely to catch up with supply until 2022.
On day two of industry event Hospitality Exchange, federation chief executive Janice Gault said: "Market snapshots indicate a stormy 2019 with volatility in the market. Overall analysis shows a reduction in occupancy levels and a decline in rate."
She said Northern Ireland needed a new tourism selling point - suggesting something like Failte Ireland's Wild Atlantic Way promotion, but for the north west and west coast.
"Demand is growing, but this needs to be accelerated with a number of interventions, including increased promotion, a bigger marketing budget and a proposition of scale for Northern Ireland along the lines of the Wild Atlantic Way," she added.
"Measures like this will allow the market to adapt to and absorb new supply. There has been a seismic change and a response of equal measure is required to create new business."
Ms Gault said challenges for the sector included skills and staff, as well as Brexit, which had led to "considerable uncertainty".
"Added to this are the issues around tax, in particular VAT, access constraints and capacity at key attractions," she said.
"You can see why the market is experiencing a shudder as we come to the end of an era of exceptional trading."
And while 2019 would be quiet in comparison to the flurry of openings in 2018, it was "far from dormant", the federation said.
There are to be new openings in Londonderry and Newry and Mourne, while ventures on the north coast are now "dependent on what has become a protracted planning process".
But Ms Gault said that despite some problems, the hotel sector "has strong prospects".
However, drawing in more visitors was paramount.
"We need to increase the size of the tourism cake to ensure that each hotel gets a good slice of business," she said.
"Having spent in the region of £500m, the hotel sector is keen to see a return on this investment and a realisation of the industry's potential."
A full briefing on the forecast takes place this morning at a business breakfast at Hospitality Exchange, which is taking place at the Crowne Plaza, Belfast.
Industry STR Global figures for June revealed that occupancy rates in Belfast were down by around 4% after 1,170 new rooms were added.