The Irish Hotels Federation says that revenues and demand have plummeted in comparison with last year as a result of the Covid-19 pandemic.

A survey by the organisation found that average room occupancy stood at 42% for July compared with c.90% on July 2019, the largest year-on-year decline ever recorded for the peak summer season.

Bookings for August have also fallen, broadly in line with those in July.  Bookings for September show a further dramatic drop in occupancy levels to 24% nationally.

Reflecting the government's hostile policy to international travel, earlier this week the CSO announced that the number of overseas visitors has dropped by 97% year-on-year.

IHF president Elaina Fitzgerald Kane (pictured) said: “Even in a best case scenario, we are looking at occupancy levels of less than 30% for the year as a whole. This is nothing short of disastrous for our sector, with serious implications for the tourism industry and wider economy.

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“Unfortunately the stimulus package recently announced by the government just doesn’t go far enough, given the scale of the crisis we are facing. The measures fail to deliver the required supports around competitiveness and liquidity, which could have long-term consequences for tourism and the almost 270,000 livelihoods it supports.”

She welcomed the the expansion of the Wage Support Scheme but said  it doesn’t provide the level of assistance required to support employee retention in a seasonal business.

Fitzgerald Kane slammed the government’s failure to cut VAT for the tourism sector.

“Ireland is already a very high-cost economy by international standards, which adds to the challenges of an indigenous export industry.," she stated. “This is made worse by a tourism VAT higher than 30 European countries with which we compete. The UK, including Northern Ireland, has reduced its VAT rate from 20% to 5%.  Given how closely our economies are intertwined, a similar cut here was vital.”

Kane said the ‘Stay and Spend’ tax credit scheme would have little effect and excluded some tourism business, and added that the rates waiver must be extended beyond September to cover a full year of business interruption. 

“After that, payment of local authority rates should be based on reduced levels of activity due to the crisis. Businesses cannot be expected to pay historically set rates based on turnover figures that are no longer relevant.”

InterTradeIreland Survey

Meanwhile, InterTradeIreland’s Q2 Business Monitor reports that  while prior to the pandemic 42 per cent of firms say they were in growth mode, this has now dropped to 15 per cent.

The number of businesses across the island that are in decline has jumped from 7 per cent to 53 per cent, the report reveals.

In terms of employment, 23 per cent of businesses say their staff levels have decreased.
As regards remote working Northern Ireland is further behind Ireland, with 18 per cent of staff working from home compared to 41 per cent of employees in Ireland.

The Business Monitor also highlights a digital divide between larger firms and micro SMEs that Covid-19 has exposed. 70 per cent of firms with less than ten staff say that employees have no access to emails or company files and documents. For larger firms this drops to 37 per cent. On a more positive note, the Business Monitor found that three out of four firms plan to re-hire staff who have been laid off.

In terms of the biggest barriers to recovery, SMEs citied maintaining social distance with customers (41 per cent) and the ability to provide service in a way that is profitable because of social distancing (34 per cent). This was most marked in the leisure hotel and catering sector (69%) but it is an issue for just under a third of professional service firms (31%).

Aidan Gough, Designated Officer, InterTradeIreland, commented: “Before Covid-19 struck, the growth in cross-border trade was helping to significantly boost productivity and profitability in both jurisdictions.

“We have a wide range of Covid-19 specific programmes and funding to help cross-border traders get back on their feet and move from crisis to recovery.

“There has been a lot of interest in our Emergency Business Solutions programme. Firms are offered £2,000 /€2,250 worth of support to risk assess their current business position, assist with cash flow forecasting, HR issues and to help manage suppliers,” Gough added.

The telephone survey of 781 business was conducted between May 27 and July 1.