Report

Ireland Annual Hotel Industry Survey 2022

Crowe/Horwath HTL Ireland recently released the 26th Annual Hotel Industry Survey – a survey of the Pandemic Era, 2020 and 2021. Across 2020 and 2021, the hotel sector in Ireland recorded a massive loss in revenue due to the Government restrictions imposed to curb the spread of COVID-19, including periods of business closure, travel restrictions and social distancing as well as the reduction in worldwide travel.

Revenue fell by 65% in 2020 and 49% in 2021 against 2019 levels. The extremely low occupancy levels of 29.6% in 2020 and 39.5% in 2021, compared to 73.8% in 2019, further confirm the unprecedented impact that the pandemic had on business levels in comparison to a normal year of trading.

The cumulative impact of supports from the Government was to convert the sector from loss-making to profitable at EBITDAR level. These supports included a reduction in VAT to 9%, payroll support schemes (TWSS and EWSS), the COVID Response Support Scheme (CRSS) and other grants and cost waivers. However, the levels of EBITDAR profits for 2020 and 2021 were still down 82% and 42% respectively on 2019 levels.compared to 2019, reflecting the unprecedented challenges faced by the industry.

Occupancy and Revenue Declines
Occupancy levels fell dramatically, from 73.8% in 2019 to 29.6% in 2020 and 39.5% in 2021. Average Room Rates (ARR) also fluctuated, dropping from €114.31 in 2019 to €97.07 in 2020, before rebounding to €120.79 in 2021. Revenue per Available Room (RevPAR) similarly dropped from €84.40 in 2019 to €28.73 in 2020, with a partial recovery to €47.73 in 2021.

Government Support: A Crucial Lifeline
Government supports were pivotal in sustaining the hotel industry. Without these supports, the sector would have faced significant EBITDAR (Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent) losses and widespread solvency issues. Supports included the Temporary Wage Subsidy Scheme (TWSS), Employment Wage Subsidy Scheme (EWSS), COVID-19 Restrictions Support Scheme (CRSS), VAT rate reductions, and various grants and cost waivers.

Regional Performance
Regional Ireland saw some periods of strong performance due to domestic travel during the pandemic. The ARR in Regional Ireland rose to €121.18 in 2021, surpassing 2019 levels by €18.74. However, occupancy remained low at 40.9% in 2021 compared to 70.0% in 2019. Government supports significantly boosted EBITDAR profits, which increased from a loss of €3,093 in 2020 to a profit of €9,038 in 2021.

Dublin’s Struggles
Dublin faced more severe challenges with a significant drop in ARR from €142.42 in 2019 to €119.63 in 2021 due to weaker demand. Despite government supports, EBITDAR profits in Dublin were only 32% of 2019 levels, compared to 78% for Regional Ireland hotels.

Financial Strains and Adaptations
The pandemic forced many hotels to seek financial relief, with 52% requesting capital moratoriums on bank loans, 26% increasing overdrafts or taking new loans, and 18% requiring personal fund injections from owners. These measures were essential for maintaining cash flows and business operations during the challenging period.