BDO is delighted to introduce our Hotels, Restaurants and Bars report 2015
The report shares the perspectives of industry and business leaders, providing insight and analysis on the performance of the three key sectors at a pivotal time in the recovery of the Irish economy.
An increase in inward bound tourism, benefitting from the weakness of the euro against sterling and the dollar as well as the retention of the 9% VAT rate for the tourist industry means that the tourism and hospitality industry can expect to put in a very strong performance for the remainder of 2015. This is according to the comprehensive findings of the BDO Hotels, Restaurants and Bars Report 2015.
The report, conducted by BDO’s Limerick and Dublin office, shares the perspectives of industry and business leaders, providing insight and analysis on the performance of the three key sectors at a pivotal time in the recovery of the Irish economy. The findings follow on from last month’s BDO’s Business Confidence Monitor showing optimism levels at 63.4 points, the highest levels recorded over the last four years.
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Liam Hession, Partner, BDO Limerick said:
“What is clear from all contributors is the extent to which the hospitality industry has been on a journey over the last number of years. As new market realities imposed themselves, individual businesses survived, and in some cases grew, by transforming their operating models and refocusing their attention on delivering value for money while maintaining quality. Against the improving economic backdrop of 2015 and the strengthening of consumer confidence, meaningful growth is now being seen across all three sectors. Bouyed by the increase in inward bound tourism, and benefitting from the weakness of the euro against sterling and the dollar, the tourism and hospitality industry can expect to put in a very strong performance in 2015.
“However, there is a number of causes for concern, as highlighted by our contributors. The first of these is the wide evidence of a three-tier recovery within the economy, with Dublin leading the way, followed by the other major urban centres and tourism destinations including Limerick, and leaving broad swathes of rural Ireland behind.
Secondly, although figures from the Department of Transport, Tourism and Sport show approximately 200,000 jobs in Ireland are based on tourism, there is little evidence of the kind of joined-up thinking and investment necessary to ensure skills shortages within the hospitality sector are being addressed.”
He concluded; “The government have had a critical part to play with regard to maintaining rates however the challenge remains to create a joined-up cohesive strategy with stakeholders at a macro level to benefit from the growth in the sector and present a stronger voice when lobbying for change.”
Reviewing the hospitality sector performance, BDO notes that while 2014 was the year that saw definitive recovery the Irish hotel market; the first half of 2015 has already accelerated beyond this. The shift in gear was evident in April when figures from CBRE showed a higher volume of mergers and acquisitions activity in Q1 2015 than for all of 2014. Some 25 hotels changed hands in 17 transactions over the first quarter, with a combined value of over €500m. For 2014, in contrast, total sales had been €341m.
Ger Holliday, Partner BDO commented: “The importance of increasing tourism figures forecast for both the overseas and domestic visitors gain greater traction when we consider the potential in the sector for example with Ireland’s bid for the Rugby World Cup in 2023.”
Liam Hession reveals a number of key factors as evidence that economic recovery is encouraging customers to once again spend in the restaurant industry. Dining experiences outside the home were estimated to be worth €6bn to the Irish economy in 2015 and, according to a recent survey by Pallas Foods, 80% of business owners in the sector are confident of further growth in 2015. In addition, a further 45% are planning to create new employment this year. The 9% VAT rate is also widely viewed as critical to breathing life back to the sector at a time when confidence was at its lowest ebb.
Ireland’s pubs have borne the brunt of economic and social changes in the last few years however, for Dublin, at least, the story of 2015 is positive, with growth and recovery across the market and clear signs that investors view current asset prices as an attractive basis on which to make long-term investments. The level of sales and purchases of licensed premises in Ireland in 2015 reflects this outlook, building on a surge in acquisitions in 2014.
About the BDO Hotels, Restaurants and Bars Report 2015
Sharing the perspectives of industry and business leaders, the BDO Hotels, Restaurants and Bars Report 2015 provides insight and analysis on the performance of the three key sectors at a pivotal time in the recovery of the Irish economy.