Irish hotels and guesthouses will finally reopen tomorrow, 2 June, but they’re facing costs of up to €60 million to do so, according to a new survey by the Irish Hotels Federation (IHF).
The IHF estimates that it will cost businesses roughly €964 per bedroom to reopen – the equivalent of over €72,000 for an average 75-bedroom hotel.
The IHF is calling for an increase in reopening grants to reflect actual costs. Tim Fenn, IHF Chief Executive stated: “Quite simply the cost of reopening is a huge cashflow challenge for most hotels and guesthouses who have already experienced nothing short of a catastrophic financial shock from this pandemic with months of prolonged closure and partial reopening.”
An Increase in Reopening Grants
The IHF is looking for a doubling of last year’s reopening grants, which would involve a reactivation and an increase in the Restart Grant Plus from the previous level of up to €32,500. Currently hotels can also qualify for an extra “restart week” under CRSS to a maximum of €5,000.
“Our members are delighted to be reopening and are really looking forward to welcoming back team members and guests. However, the cost of reopening a hotel after months of prolonged closure is significant given the volume of operations and facilities involved. We are asking that reopening grants are put in place that reflect the true scale of the reopening costs including considerable training and upskilling to enable the continued survival of businesses whilst laying the building blocks for recovery and the restoration of employment,” said Mr Fenn.
According to the IHF survey, members estimate that they are spending almost €25 million on payroll, training and recruitment costs during the four weeks ahead of re-opening on Wednesday, net of EWSS supports. Meanwhile, cleaning and maintenance costs associated with the prolonged closure as well as costs related to fixtures, fittings and other safety measures linked to COVID-19 restrictions are estimated to cost a further €15 million.
Summer is an Industry Life Buoy
Mr Fenn welcomed government supports but also pointed out that although the summer season is “a lifebuoy for many hotels, carrying them through the remainder of the year,” members are currently reporting booking levels of “just 31 per cent” for July.
“While we expect bookings to increase further, after months of prolonged closure they are not expected to reach sustainable levels anytime soon,” he said.
Innovation and Creativity
The reopening costs quoted by the IHF exclude expenditure by hotels on renovations and enhancements to their facilities and operations.
“Hotels have been busy in the past few months in anticipation of reopening, thinking creatively and innovatively about how they can enhance guests’ experiences,” Mr Fenn emphasised.
“We are seeing great examples of creativity, innovativeness and flexibility in terms of how hotels and guesthouses community are using their property’s spaces as well as rethinking services, restaurant and leisure facilities so that guests can relax and enjoy their break, secure in the knowledge that they are staying in a safe environment,” he said.
“The hotel sector was brought to its knees by the COVID-19 restrictions. Tourism will recover but, in the meantime, hotels which are an integral part of its infrastructure require continued government supports to enable survival and take those first and all-important steps into recovery,” he added.