A report on the Irish hotel sector has found that profits in the industry have fallen by 50% since 2007, while room rates have dropped back to 1999 levels.
The report by consultants Horwath Bastow Charleton, which covered 2009, says the hotel sector is now in a very unstable position, with profit levels at many hotels not enough to re-pay their bank loans.
It says the average room rate in the Republic of Ireland last year was €77.81, down 20% from 2007. Horwath Bastow Charleton says the average rate has fallen by another 10% in the first six months of this year.
The consultants quote Central Bank figures showing that the hotel industry owed €6.4 billion at the end of last year. The report says more than 40% of Irish hotel rooms, or 25,000, were developed over the last 10 years. Horwath Bastow Charleton estimates that the average debt per room of these hotels is around €135,000.
The report says the newly-developed four and five star resort market has been hit hardest by the downturn, as the costs of developing such hotels were extremely high - especially if they included extras such as golf courses.
But the report says the average room rate in Dublin hotels is €16 higher than elsewhere, and room occupancy is 10% higher.
Howath Bastow Charleton estimates that around 30 hotels are currently in the hands of administrators.
