A new report shows that total hotel indebtedness has fallen but overhanging debt still remains an issue for many hotels, especially outside the country's main cities.

The report, written by economist Alan Ahearne in advance of an Irish Hotels Federation conference, says that total hotel debts now amount to €5.3 billion, down from €6.7 billion at the end of 2007.

Professor Ahearne estimates that €1.4 billion in debt restructuring is still needed within the Irish hotel sector.

He said this would return hotels to a financial position where they could operate on a long-term sustainable basis and commit to investment in maintenance, refurbishment, renovation and innovation.

Today's report shows that while debt per hotel bedroom has decreased from €113,250 to €92,750 over the last two years, progress has not been even. 

It notes that advances have been made in urban areas - especially Dublin - while many medium-sized and smaller hotels still require investment and debt restructuring.