Covid’s hammer blow to NI hotels laid bare
We all know that Covid-19 dealt a devastating blow to tourism around the world and now an annual survey has spelled out just how badly hit the Northern Ireland hotel industry was in 2020.
ASM Chartered Accountants found that NI hotels were, on average, open for only 230 days or 62.8% of the year.
The survey also revealed that travel restrictions and periods of lockdown resulted in the lowest demand for bedrooms across Northern Ireland in decades, with average bedroom occupancy of just 30%.
This was on the back of a watershed year in 2019 when occupancy rates averaged 79.3%.
Commenting on the results, Michael Williamson, Director of Consulting at ASM Chartered Accountants said: “The thoughts of everyone in the industry are for those that have lost loved ones or who have contracted Covid-19, but the devastating impact of Coronavirus on wider society means that we have all been directly affected in one way or another.
“Non-essential retail, tourism, close contact services and others have been especially hard hit and we have all been blind-sided by this global pandemic.
“Even in early 2020, there was confidence that tourism would set another new benchmark for Northern Ireland and that the near £0.5bn of investment in hotel stock during the preceding six years would prove to have been very timely. That all changed literally overnight with businesses having to close.
“Trading was seriously compromised at hotels during the year, with some areas faring worse than others.
“In the Derry City and Strabane District Council area, hotels were open for only 195 days on average which means that earnings were virtually wiped out. Worryingly, staff numbers declined by 54%.
“The basic principle in business that costs reduce at a slower rate than a decline in revenues was proven in 2020.
“Average income including grants reduced by 56%, but earnings reduced by 90% compared to 2019. This was a hammer blow to the industry”.
|Northern Ireland – all hotels averages||2018||2019||2020|
|Average number of days open||365||365||230|
|Room Occupancy %||75.6%||79.3%||30.0%|
|Average Daily Room Rate||£96.90||£100.89||£96.97|
|Revenue per Available Room||£73.28||£80.01||£29.07|
|Total Revenue per Room||£69,158||£72,992||£32,270|
|EBITDA per Room||£13,567||£13,778||£1,319|
Other findings by the survey include the cost to hotels of dealing with Covid.
After the first lockdown, getting “Covid ready” cost an average of £18,775 per hotel. Ongoing expenditure on PPE averages £2,200 per hotel per month while stock wastage arising from enforced periods of closure averaged £4,600 per hotel per shutdown.