Although short of the 2019 record of 2.73 million, the survey ’s results illustrate a buoyant market with strong signs of continued growth in the wake of the COVID-19 pandemic. Last year, bedroom letting rates reached an all-time high, averaging £134.32 compared to £127.98 in 2022 with hotel services such as food and beverage sales also growing during the year. Overall, income reached a new benchmark high of £92,314 per available room.
Corporate bookings, which had declined greatly compared to 2019 rose last year, accounting for an estimated 10% of bedroom bookings across Northern Ireland compared to 4.1% in 2022. Special events and meetings accounted for 5.8% of overnight stays in 2023 compared to 7.2% in 2022, while there was strong demand for rooms by tours and groups in 2023 which accounted for 13.9% of occupied rooms, compared to 6% in 2022.
Commenting on the results Adrian Patton, Director at Sumer Northern Ireland, said: “The industry continues to make strong progress in the wake of the pandemic. Demand for accommodation is on an upward trajectory and while overall bedroom bookings still lag behind the high watermark of 2019, improved room rates mean that income from the sale of bedrooms is the highest on record. So, too is income from other hotel services so when looking at overall revenues, the industry has performed very well.
“As we know, the hospitality industry has faced huge adversities of late with rising overhead costs alongside the attraction and retention of staff. With this in mind, when we look at the levels of earnings – before interest, depreciation and tax – as a percentage of revenues, the ratio of 20.4% for 2023 is on a par with the 21.0% recorded in 2022 and 18.9% in 2019.
“It is also worth noting that the improvement in revenues was not uniform across Northern Ireland. Demand for rooms in rural hotels did not improve materially when compared to 2022, whereas in Belfast and Derry/Londonderry, there was a significant increase in the number of bedrooms occupied.
“On balance, the report shows a very good year for hotels in Northern Ireland but ongoing challenges around operational costs, staffing, the removal of support for business rates and a high rate of VAT means that hotel managers continue to face a range of obstacles.”
Meanwhile, according to Michael Williamson, Consultant at Sumer Northern Ireland, the higher prices currently being charged at hotels is justified given the recent rise in inflation, interest and tax rates.
Michael explains: “If we look at how the costs and income in the industry has moved in the period since 2016, it’s clear that hotels have only increased prices to preserve their earnings margin.
“For instance, when comparing 2023 with 2016, payroll costs have increased by 49.2% while overall operating costs have increased by 52.4%. By contrast, revenues in 2023 were 49.6% higher than in 2016.
“Earnings does not take account of interest charges on loans or corporation tax on profits. Both interest and tax rates have increased materially in the past couple of years, so while hotel prices and overall revenues have increased, they have not grown higher than the increase in operating costs, which means that post tax profits have declined. Indeed, it is easy to forget that the industry mostly lost money in 2020 and 2021 yet it continues to invest for the future despite the many challenges it faces.”
John McGrillen, Chief Executive Officer at Tourism NI added: “This is a very welcome survey and update on this sector. The past few years have been extremely difficult for those in the hospitality and tourism industry, and therefore, it’s heartening to see hotel bedroom occupancy rates continuing to rise.
“Rising inflation and supply chain issues have culminated in increased prices for the customer but this has been a necessary step to ensure that our world-renowned industry can survive and thrive.
“Although challenges still remain, the results of the Hotel Industry Survey show strong signs of stability and growth which the sector can continue to build upon in the near future.”
For further information on Sumer Northern Ireland, visit the website: www.sumerni.co.uk.
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John McGrillen, Chief Executive Officer at Tourism NI, Michael Williamson, Consultant at Sumer Northern Ireland and Brian Clerkin, Managing Director at Sumer Northern Ireland.
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