Hotel sector facing ruin, says expert

THE Irish Hotels Federation (IHF) received a major, independent economic report undertaken by economist Peter Bacon, which warns that the entire hotels sector faces insolvency.
The report confirms the worst fears expressed by the IHF since the recession started as Mr Bacon outlined a series of urgent actions needed now if the hotel sector is to survive.
The report highlights the damage that is being caused to the hotels sector by financial institutions and banks supporting unviable and insolvent enterprises.  It underlines the urgent need to address over supply within the sector and the negative effect of ongoing tax regulations that impede the ability of unviable hotels to exit from the market.
Tourism is one of the largest indigenous contributors to the economy and the report reinforces hoteliers’ concerns that the industry will collapse unless action is taken.
According to Matthew Ryan, President of the IHF, the report contains a very detailed and structured approach on how to deal with a sector in crisis.
“This report is possibly one of the most detailed and comprehensive analyses of the sector ever undertaken and includes very serious measures to improve the viability of the sector.
“It calls for the urgent active participation of the stakeholders involved, including the banks and financial institutions, the Government, the tourism bodies and the hotel sector itself, to seek effective solutions.”
The report also supports the urgent casefor working capital and cost reduction supports to be provided to businesses, which would otherwise be viable.
“These businesses are well-placed to survive in the current economic environment provided an effective restructuring of the industry is achieved.