ASM Chartered Accountants release NI hotel survey

by • July 2, 2015 • BusinessComments (0)2315

The hotel sector in Northern Ireland has performed well since 2012, despite ongoing recessionary pressures.

The programme of major events, which started with the Our Time Our Place campaign and the Titanic Centenary in 2012, was followed by Derry/Londonderry UK City of Culture, the World Police and Fire Games and the G8 Summit in 2013 the Giro D’Italia in 2014.  However, there is no doubt that the strengthening of £ sterling and the lower rate of VAT in Ireland has started to cause problems for many hotels located close to the border according to the Annual Hotel Industry Survey published by ASM Chartered Accountants.   

Commenting on the survey results Michael Williamson, Director of Consulting at ASM Chartered Accountants said:

The overall demand for hotel bedrooms across Northern Ireland increased in 2014, but that average is being influenced by the very strong performance of the Belfast market, which accounts for around 40% of the total room stock in the country.  

In rural areas, the average occupancy rate in hotel bedrooms did not improve in 2014 and in Derry/Londonderry, it actually declined when compared to 2013.  Our research also shows that in general, food and beverage sales in hotels declined in 2014 and that those hotels located closer to the border with Ireland, tended to be affected more.  This indicates that the lower rate of VAT in Ireland and the very unfavourable £ sterling exchange rate are having a negative impact on parts of the industry. Indeed, it is a major concern for some hoteliers”   

The key statistics from the ASM report show that:

  • across Northern Ireland, the average bedroom occupancy rate in 2014 increased to 76.0%, as against 74.8% in 2013;
  • the average rate per room sold (net of VAT) across the country was £70.78, a 4% increase on the £68.17 recorded in the previous year;
  • combining these two measures gives the room yield or REVPAR (revenue per available room).  The Northern Ireland REVPAR average for 2013 was £53.79, a 5.5% improvement on the 2013 average and the highest REVPAR on record;
  • meanwhile, total revenues were static year on year meaning that in general, non –bedroom related income declined in 2014;
  • the number of bedrooms occupied by of “out of state” visitors was consistent with 2013 at 68.4%.  The proportion of rooms occupied by visitors from GB increased to 37.3% (2013: 29.8%), whereas the proportion occupied by visitors from the Republic of Ireland declined to 10.0% in 2014 and against 20.9% in 2013;
  • the shift in the mix of business towards more profitable activities, and very effective cost control measures led to improved profitability in most hotel segments, and especially in Belfast (hotels in Derry City actually experienced a decline in profitability); and
  • overall, profit (before interest, depreciation and tax) increased by an average of just over 20% year on year – but this was heavily influenced by the performance of the Belfast market.

Michael Williamson adds: “The downturn in visitors to hotels from the Republic of Ireland was mitigated by increased demand for bedrooms from other out of state markets.  This is to be welcomed and is a reflection of Northern Ireland’s increasing profile as an interesting and exciting tourist destination and the more general improvement in economic conditions.   

Nonetheless, I think that we are witnessing the emergence of a 2-speed hotel sector in Northern Ireland.  The Belfast market continues to perform at a very high level and to grow, while hotels located elsewhere are finding trading conditions a little more difficult than has been the case over the past few years.  Certainly, those located closer to the border are finding the marketplace very difficult and unfortunately, there seems to be no immediate relief.  The VAT and exchange rate differential is not doing those operators any favours at all”.

Bill Wolsey, owner of The Beannchor Group commented: “The hotel sector over the last two years has performed very well. There has been a year-on-year increase  over the last four or five years and as long as we continue to have political stability I see this trend continuing. Our occupancy [at The Merchant Hotel] year-on-year is up a couple of per cent, which is a healthy figure. We have plans to open a new hotel in April or May 2016 which we hope will be another success story not just for us but for the whole city.”


ASM Chartered Accountants, which has offices in Newry, Dundalk, Dublin, Dungannon, Magherafelt and Belfast. For further information visit:



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