Hotel sector has ‘outstanding’ year as occupancy and revenues soar

Belfasts extended Waterfront Hall has given the city a high value lift says the ASM hotel report
Belfasts extended Waterfront Hall has given the city a high value lift says the ASM hotel report

The hotel industry in Belfast and across most of Northern Ireland enjoyed one the best years on record in 2016 as fall in the value of sterling increased business.

That’s a key finding of a report into the sector produced by ASM Chartered Accountants.

The report reveals that demand for hotel bedrooms across the province increased to a record high occupancy rate of 77.9%, while the average room rate, the price for a room excluding VAT, increased by 4.1% to £77.95;

Together the figures indicate that the revenue per room was £60.74, a 4.6% rise on 2015.

However, while Belfast had a strong year, with occupancy levels at 83.5%, and country and spa hotels averaged 76% and 80.3% respectively, hotels in Londonderry suffered a fall in profits on average despite rising demand for rooms.

Despite a a sluggish start to the year, director of consulting at ASM, Michael Williamson, said 2016 had turned out to be “outstanding”.

“Without doubt, the almost instant decline in the value of sterling on the back of the EU referendum result in June 2016 boosted our competitiveness as a destination and in Belfast especially this made a tangible difference to the demand for accommodation in the second half of the year,” he said.

Stressing it would be wrong to credit all of the progress to the exchange rate, he said growth had been recorded in many areas outside the capital, while in Belfast, the opening of the extended Waterfront Hall had massively improved its appeal to the meetings, conventions and exhibitions segments.

That he described as a “a very important and high spending tourism market that we expect to add materially to the demand for accommodation in future years”.

In addition, Mr Williamson said the appeal of the province to the GB market had also been enhanced by sterling’s fall and the subsequent rise in the cost of European trips.

“Consequently, it comes as no surprise that the survey shows an increase in the proportion of out of state visitors using hotels in Derry City and in Belfast,” he said.

Demand from these markets has grown to 67% of bedrooms occupied in Londonderry as against 62% in 2015, while in Belfast, the proportion of rooms accounted by out of state visitors increased from 73% to 78%.

“It is now that we should be maximising the opportunities offered by the relative weakness of sterling by increasing our marketing efforts in Great Britain and in other out of state markets.

“We can be sure that our key competitors will continue to invest heavily in marketing their destinations such is the importance of the tourism industry to their respective economies”.

The report also highlights that the performance of the tourism industry over the past five years has led to a wave of new hotel announcements in Belfast, Derry City and along the North Coast.

In Belfast, there are around 1,100 new hotel bedrooms currently under development with the prospect of further development within the next two years.

On the North Coast, there are plans for an upmarket resort/spa hotel and in Londonderry new mid-market accommodation is expected to come on stream in 2019.

• Morning View, page 20