Room occupancy in the State’s hotels and guest houses fell back in 2024 and there are warning signs on the horizon as rising costs hit the industry, the Irish Hotels Federation has said.
Commenting on the outlook for the coming year as hoteliers gathered for their annual conference in Killarney on Monday, federation president Michael Magner said advance bookings were down, with a drop of about 2 per cent worth about €100 million, in 2025 compared with this time last year.
Mr Magner said alongside faltering bookings there appeared to be no let-up in the “relentless increases in the cost of doing business”.
He said 2025 would be the second year in a row that business sentiment among hoteliers was down, with just 37 per cent reporting a positive outlook for trading conditions over the next 12 months. This contrasts with 47 per cent who reported a positive outlook this time last year and 74 per cent the previous year.
The research conducted among the federation members showed average national hotel room occupancy stood at 74 per cent, in 2024. This was down 2 per cent on the previous year when there was an occupancy rate of 76 per cent.
The dip is seemingly set to be extended this year, with hoteliers reporting a further drop of 2 per cent in business levels on the books for 2025.
While results indicate that the domestic market and North America are holding up so far, hoteliers are reporting a net drop in bookings from Britain, Northern Ireland and the rest of Europe.
Mr Magner said exceptional increases in operating costs over the last three years had eroded profitability, particularly for smaller hotels with fewer than 100 rooms that were more reliant on food and beverage sales.
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While hoteliers continue to rank rising costs as the most serious challenge facing their business, the wider economic environment in which hotels operate is also a growing concern. Some 94 per cent of hoteliers said they were worried about the global economy and the potential impact of political uncertainty in key markets. Closer to home, some 78 per cent of hoteliers said they were concerned about the outlook for the Irish economy over the next 12 months with consumer finances remaining under considerable pressure and international developments posing risks to the Irish economy.
“The Government, in partnership with the industry, has a pivotal role to play in creating a more positive business environment for enterprises throughout our sector,” Mr Magner said.
However while business sentiment was low, he said the federation was optimistic about the Government’s decision to move responsibility for tourism to the Department of Enterprise. He said the move would “facilitate a more joined-up and coherent approach to best support businesses within our sector. It will also help ensure a greater focus on creating the optimum conditions for business viability with our wider tourism industry – a vital part of the economy supporting some 270,000 livelihoods.”
“The Government, in partnership with the industry, has a pivotal role to play in creating a more positive business environment for enterprises throughout our sector,” said Mr Magner. “There is a lot more that the Government can do to assist businesses in labour intensive industries such as our own.”
