By Sean Moriarty

Hoteliers in Killarney have outlined, for the first time, the challenges they face, as a result of soaring costs in all sectors.

With barely a week left in the traditional peak summer tourism season, operators are bracing themselves for a hard and long winter.

Difficulties in the hotel industry affect everyone in Kerry; in pre-COVID times the sector supported 15,700 jobs and generated €592 million in local tourism revenues annually.

“The outlook for our business will be different from October onwards and into 2023 as we deal with a number of pressing challenges including heightened uncertainty around inflation, escalating business costs, increasing risk of a global downturn and damage to consumer sentiment,” said Bernadette Randles, the chair of the Kerry branch of the Irish Hotel Federation.

She revealed some of rising costs her family’s business has experienced in the last year.

“Just to put into context the points and why we make them I will give you samples from the Dromhall Hotel costs but I know all my colleagues in our industry and other industries are facing a lot of the same key challenges,” she told the Killarney Advertiser.

ELECTRICITY

The ESB bill at the Dromhall Hotel has increased by €6,000 per month. In June 2021 the hotel paid €4,820.52 but in June this year they paid €11,369.69. In July 2021 the cost of electricity at the Muckross Road venue cost €5,597.09 but that had jumped to €11,892.21 by July this year.

“This is for, more or less, the same units,” explained Ms Randles.

GAS

In the same period gas prices increased substantially too. In June 2021 she paid €3,452.80 but 12 months later her bill was €4,801.45. It was much the same story in July, in 2021 the hotel paid €3,191.11 and a year later it cost €4,467.85.

“This was more or less for the same usage of litres in 2021 and 2022,” she added.

FOOD

The cost of wholesale food into restaurants and hotels has also risen dramatically.

A simple barometer is the cost of a loaf of bread. A sliced-pan cost €0.97 a year ago – today it is €1.35.

Cooking oil has increased from €22 for a 20 litre drum to €38 in the same time period while a 25kg sack of plain flour was €16 a year ago but now costs €21.

Meats like a striploin of beef went from €12.50 per Kg to €14.50 per Kg; a chicken fillet went from €0.98 cent per fillet to €1.35 which shows prices have risen dramatically.

“All these suppliers are facing the same increase in costs so hence they too have to increase their costs. It affects us all,” she added.

FUTURE

“While our industry is currently seeing a welcome recovery in tourism, this is being boosted
significantly by a number of one-off short-term factors including high levels of pent-up demand, a
temporary increase in consumer spending post COVID and displaced business from 2020 and 2021,” she said.

“A key challenge facing our business and the industry as a whole is the escalating cost of doing
business which is having a detrimental impact across all areas of our operations.”

BUDGET

The Irish Hotel Federation is calling for a number of key measures from Government as part of Budget 2023.

They include:

1. Recruitment, Training and Development: Additional funding for hospitality recruitment and career
awareness, and targeted resources for training and skills development.

2. Tourism 9% VAT: Retention of the 9% VAT rate for tourism businesses to support cost
competitiveness in line with European competitors. The majority of Europeans have a low VAT rate
on accommodation. Increasing the VAT to 13.5% would leave us with the second highest rate in the EU.

3. Investment in Tourism Marketing and Development: Continued investment and support for tourism marketing both domestically and overseas.

4. Cost of Doing Business: Improve cost competitiveness within the economy and avoid any cost increasing measures affecting tourism businesses.

5. Sustainability: Targeted funding for a national hotel retrofitting scheme to reduce carbon footprint throughout the sector in line with the Government’s climate action goals.

6. Insurance Competition: Acceleration of work with Department of Finance to attract more insurance underwriters into the Irish insurance market.