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Highlights from the 2020 IHF conference
Panel discussion at the 2020 IHF conference
Crowe partner Aiden Murphy shares some highlights of the 2020 IHF Conference held recently at Galmont Hotel Galway. Under the conference theme “Mindset to Achieve”, hoteliers discussed concerns about uncertainties surrounding coronavirus, Brexit, the impact of new supply on Dublin hotel rates, labour shortages, housing for employees and the election impasse.
Airbnb – An unfair playing field with noisy neighbours
One of the ways Airbnb in Ireland continues to expand and grow is through the prevalence of commercial operators setting up as hosts of multiple properties. These entities appear to be operating outside of the same regulations imposed on registered hotels and guesthouses and in breach of the short-term letting regulations that came into force in 2019. In order to better enforce these regulations, new legislation may be required that forces Airbnb to centrally delist any property once booked for 90 days, as otherwise these restrictions will be ignored.
Up to 20% of residential properties in key tourist areas are often listed through Airbnb, as the income these units can earn through Airbnb exceeds traditional letting income as private residences. This is the case in cities such as Amsterdam, Edinburgh and Barcelona.
Hoteliers at the conference discussed the suggestion that properties available through Airbnb should have to pay a registration fee to better reflect the commercial rates paid by traditional operators offering short-term accommodation. A registration fee of €300 per unit could discourage the preference to register with Airbnb and ease the pressure on existing operators.
Surveys from cities which have a high concentration of Airbnb properties reveal that people were generally supportive towards allowing property owners to host guests at their property for a profit. However, when asked if they would like their neighbor to operate an Airbnb property, they were less supportive. Anti-social behaviour, noise and security risks linked to short-term lets to strangers is becoming a major concern for adjoining property owners who are finding themselves disturbed by the comings and goings of unknown individuals.
It is similar to the public being in favour of amenities such as Croke Park in their city but at the same time not wanting it located beside them.
Attracting and retaining staff
With the CSO revealing hospitality payroll costs increasing by over 7% against inflation of only 1% in 2019, the need for hotels to find more ways to attract and retain staff is greater than ever.
Hoteliers discussed how they can enhance employee loyalty by investing more in staff development programmes and putting more emphasis on recognising staff achievements to ensure greater engagement and overall commitment to the business.
Hotels that provide upskilling and promotion opportunities are better positioned to attract and retain staff and avoid the cost of poor service levels that can come with high staff turnover.
Support regional tourism by encouraging visitors to “Keep Discovering”
Fáilte Ireland recently unveiled its new domestic and Northern Ireland marketing campaign entitled “Keep Discovering” to help grow domestic holidays in Ireland. Hoteliers recognise that promoting local “experiences to be discovered” will help attract both domestic and overseas tourists to their area.
With Fáilte Ireland targeting 11.6m overseas visitors by 2025 – 2m higher than in 2019 – there is significant opportunity for tourism to underpin and deliver economic growth and job creation right across regional Ireland.
The key to ensuring the success of this initiative lies in expanding the number and range of these “discovery experiences” to attract as broad a range of visitors as possible and provide them with a compelling reason to return each year, while at the same time ensuring there is capacity available to meet demand.
Home advantage to combat impact of coronavirus
At the moment it is impossible to predict the full impact of coronavirus, but hoteliers believe that 2020 could be a major year for staycations as holidaymakers decide to stay closer to home to avoid the health risks and travel restrictions associated with international travel.
Personal health and safety has always been a key factor determining the choice of holiday destination. With widespread cancellations expected in the tourist sector, the success of the year for domestic hoteliers will very much depend on staycations and the ability of businesses to replace income from traditionally higher-spending overseas tourists through a higher volume of domestic visitors.
Spreading the value message to fuel demand
Over the last 18 months, more than 2,500 new hotel rooms have been added to the Dublin market. This new competition has brought a huge boost in terms of room affordability and pricing and has meant that for the first time in recent years, the capital is now offering excellent value as a destination. The continued delivery of new supply over the next two years should help keep a ceiling on room rates.
Spreading the value message will be key in creating new demand for Dublin, and will also the benefit the regions as Dublin is the gateway destination for much of regional tourism.
A return of the 9% VAT rate unlikely
The conference moderator Ivan Yates, having commentated directly on the political debates in the run-up to the recent election, said that there was no real appetite to reintroduce the 9% VAT rate on hotel accommodation. The issues of healthcare and housing dominated the public debate and would be the priorities for the next programme for government and future budgets.
Hoteliers at the conference voiced concerns about the softening room revenues and increasing costs which are starting to squeeze profits and cash flows. This has the potential to limit the investment required to ensure a quality product as well as limit future increases in capacity to support tourist growth targets.
Will 2020 be remembered as the year of “Dublin for the holidays but Kerry for the Sam”?
A personal highlight as a Kerryman was becoming reacquainted with the Sam Maguire Cup courtesy of the AIB exhibition stand, and taking a moment to dream that by the end of the summer, it may return to Kerry from its extended holiday in Dublin!
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