A ring around hotels during the week revealed just how many bargains are available to consumers in the sector, as room rates drop and add-ons are offered in an effort to fill the huge number of rooms built during the boom, writes Rosita Boland
IF YOU HAVEN'T managed to go abroad to chase after the increasingly elusive sun this summer, there's the small consolation of knowing that you have a choice of 926 hotels in the State to stay in this weekend instead. You also have an excellent chance of getting a bed in most of them, no matter how upmarket they are, never mind the fact that it is August and thus traditionally the busiest month of the year. In fact, the more high-end the hotel, the more consumers can look forward to finding increasingly good deals in the future.
"As I often say, you can't put last night's empty room in the freezer and sell it next week," quips John Power, chief executive of the Irish Hotels Federation. "Hotel rooms are as perishable a commodity as airline seats."
This summer, prices for hotel rooms are lower than last year, and coming down all the time, as a look at ongoing media advertising confirms. This week, the latest Consumer Price Index results showed that the price of hotel accommodation fell 0.3 per cent last month. This was the first time prices had fallen in this category in July since monthly CPI records began 11 years ago.
Ringing around a number of well-known hotels on Wednesday looking for four double rooms for this weekend turned up positive results from all of them. Internet booking is common, and heavily promoted by hotel websites, but the disadvantage of online booking is that you can't negotiate with a computer. A direct call to the hotels themselves resulted in some offering further discounts beyond the advertised website offers.
At the five-star Hayfield Manor in Cork, there were four rooms available for €230 per room per night, plus breakfast. Was that their best price? They could do them for €210 each. When I told them I'd get back to them - that much-used phrase that is polite shorthand for "thanks but no thanks" - the price dropped again, to €200 per room. "That's the very lowest we could offer." So in the space of a couple of minutes, the price of four rooms for a weekend in a five-star hotel dropped from €1,840 to €1,600.
The Philip Treacy-designed G Hotel in Galway had "rooms in all categories of prices" available. Superior rooms were being offered for €220 per room per night. Deluxe rooms were €280, and suites were also available. "We are finding a lot of our bookings are last minute."
However, the Clarion Hotel in Limerick had "very limited availability" left - only six deluxe rooms - as they were offering a special package: breakfast, plus dinner one evening, was being offered at €390 per couple for two nights.
Dinner was also being offered at the Glasshouse in Sligo, where the price for two nights was €338. "We've lots of rooms this weekend - no problem."
IN DUBLIN, THE Holiday Inn on Pearse Street only had two doubles left, at €165 per room. Across town, the Shelbourne Hotel had "a good few luxury queen rooms" left for Friday night at their lower scale and one for Saturday, at €239 per room per night. "These rooms have views of the back of the hotel, or the interior of the hotel." Translated, rooms with no views. Also on offer were Heritage Rooms, for €299 a night. "These have views of Kildare Street, and they're larger. Also, you have access to the Heritage Lounge, so you could have complimentary breakfast there." Hang on, isn't breakfast already included in the price? "Yes, but you could have the option of having it in the Heritage Lounge instead of the restaurant if you liked." So it's not really an extra? "Well, no."
The Monart Destination Spa in Enniscorthy, Co Wexford, still had rooms available for their special weekend offer. It was €275 per person sharing, with breakfast and unrestricted access to the thermal suite (but not the Swedish massage). "We recommend making a booking quickly," they said.
THERE ARE 926 hotels in the State which are registered with the Irish Hotels Federation, offering a total of 60,135 rooms. Hotels formed a significant part of the commercial property building boom of the last decade, as they availed of tax breaks via capital allowance schemes: in 1997, there were only 27,000 hotel rooms. In 2007 alone, 8,233 new rooms were built, which was the highest number of rooms coming to the market in any one year. That all adds up to a large number of beds to sell, and since most hotels now open year-round, that presents a year-round business challenge.
Last week, Horwath Bastow Charleton, an accountancy and business advisory practice that specialises in the hospitality sector, announced the results of the annual Ireland Hotel Industry Survey, for the last calendar year. "Hotels in Dublin are experiencing a decrease in profitability due to many properties discounting room rates," it found, adding that the two biggest cost issues for hotels were payroll and energy.
Given the current volatile price of oil, and the fact that both electricity and gas are increasingly expensive, these essential operating costs are likely to increase still further. For those hotels that haven't already started to adapt their energy use, it's clear that going green is an essential investment for their future survival.
"2008 is certainly a challenging year for the hotel industry," agrees John Power. Who will survive? "It's all about controlling costs. Payroll is usually about 42 per cent of overall costs." Power estimates that for every €1 saved in wages, this is equal to adding €20 to the sale of a room.
Weldon Mather is managing director of WM Consultancy, a hospitality and tourism management company offering a consultancy service to hoteliers. "People have been ripped off in the past with prices of hotel rooms," he says. "There will be major discounting across the industry in the near future, especially at the higher end of the market. The consumer can really bargain right now, and that includes negotiating the price of weddings and conferences." Mather thinks the established and well-located hotels, with strong management, will survive. "We'll see a lot of add-ons as well. Dinner thrown in, that kind of thing."
THE DOMESTIC MARKET makes up 64 per cent of all hotel nights in the State, with most of that being outside Dublin, so encouraging repeat business is very important. To survive, hundreds of hotels will need to draw in custom with special offers, whether they be packages that include dinner or spa treatments, or by dropping prices significantly. They will also need to provide consistently good service - that unscientific, intangible, yet invaluable commodity - to entice customers to return.
In recent years, with the economy doing well, there has been a marked increase in people taking a number of weekend breaks at home during the year, usually in addition to a holiday abroad. In the current climate, who knows what the trend will be for the near future? If money is tight, would you be more likely to cut out a foreign holiday and go on a few weekends away at home during the year instead, or would you decide escaping the wet Irish summer is a priority and put your money into that instead?
Given the dependency on the domestic market - which has increased 14 per cent since 2002 - the other scenario is one that Irish hoteliers must dread to contemplate. That's the one where, no matter how discounted a hotel weekend is, people will simply stay at home as the money gets scarcer.