Good news as Galway’s hotels show return to profitability

Galway’s hotels have enjoyed a surge in profits, according to a new survey that shows occupancy levels and rates have also increased.

The survey by Crowe Horwath, advisors to the hotel sector, showed that profits per room in the past year have soared by up to 28% along the western seaboard, including Galway.

It found that profits before tax per room here were €5,471, up from €4,278 in 2011.

This was higher than the average increase of 24 per cent for all hotels across the country.

The survey found that room rates per night have also increased, while occupancy rates are on the up as well.

The annual survey, with data collated earlier this year using 2012 figures, showed room occupancy in the west is up by four per cent, from 59 per cent to 63 per cent.

Annual room rates increased by five per cent in the same twelve months period, up from €58.93 to €61.87 – only Dublin showed a higher increase in rates.

According to the survey increases in both occupancy levels and room rates have helped drive increased profitability within the sector.

However, it was noted while the profit before tax has increased significantly it is important to remember that after a number of lean years it has been necessary for hotels to strengthen balance sheets to facilitate investment in rooms and other hotel facilities.

It noted that almost 40% of all Irish hotel rooms were built between 2000 and 2007 and many now require investment to maintain standards.