Atlantic Way sees hotels on crest of wave

Galway hotels along the Western Seaboard experienced greater occupancy, increased room rates and higher profits for the third year running while still maintaining to offer the cheapest hotel rooms in the country.

The success of the Wild Atlantic Way is clearly evident in the survey compiled from Irish hotels’ 2014 accounts in the region. Promotion of the tourism route is delivering 6.5% growth in turnover in the sector, a significant increase from the 2% increase in the year before.

Room occupancy marginally increased by 1.3% to just over 65%, the average room rate went up by nearly €3 to €67.50 and the total revenue per room went up by €2,800 to over €46,000. The profit before tax per year per room across the regional hotels was nearly €6,800, according to the Crowe Horwath Annual Hotel Industry Survey.

However, the disparity between rural hotels in the west’s most visited region and the capital continues to widen.

The western seaboard still provide the country’s cheapest average room rates, with a room in January costing visitors €53. The highest average in Dublin took place during September when hoteliers were raking in over €110 a room.

Food sales in western hotels went up by 9%, far behind the boom experienced in Dublin when sales increased by over 21%.

In Dublin average occupancy reached over 77% while the average rate charged for a room in Dublin was over €97, a 7% increase year-on-year. The profit before tax per room for hoteliers in the capital was €13,800 – double that in Galway.

While room rates in the capital are some way off 2006 peak prices of €120, the average nightly cost per room is still significantly ahead of all other regions (€79 in the Midlands & East and €79 in South West).

Hoteliers reported that an 8.9% in overseas visitor numbers and the weakening euro against the sterling and US dollar as key factors behind the improved performance. Occupancy levels hit a national low of 59% in 2009.

There were 24 fewer hotels in 2014 which led to a reduction of 626 available bedrooms.

Managing operating costs are 6.7% lower than 2006 levels, while in the same eight-year period utility costs have increased by 28%.

Internet bookings are now the biggest source of reservations accounting for 43% versus just under 42% for direct enquiries.

Recovery and restructuring partner at Crowe Horwath, Aiden Murphy, said while average room rates increased by 6% on average last year and profit per room jumped by 25%, Irish hotels remained a good value proposition for overseas visitors and domestic consumers.

“Notwithstanding recent modest room rate increases, the average rates per room remain almost 16% lower than pre-recession levels.”