A new report has found that city tourism has been more severely impacted by the Covid-19 pandemic than any other form of tourism across the island of Ireland.

EY's "What now for city tourism?" report found that hotel occupancy rates in Dublin were 56% lower than regional hotel occupancy rates during the last week of July and second week of September.

This trend is also seen in Europe, as occupancy rates in main capital cities are on average 41% lower than their regional counterparts.

EY said that Irish regional hotels performed relatively well during the summer months as they reported 54% occupancy rates, outperforming their European counterparts. 

But Dublin hotels underperformed with a 24% occupancy rate compared with 38% in a city like Berlin for example. 

EY said the city tourism model relies mainly on two drivers - oversea tourists and business tourists. 

It has been most severely impacted by the restricted activity in airports and the closing of borders, which affected up to 96% of all worldwide destinations from April, the United Nations World Tourism Organisation (UNWTO) said. 

Although short-term emigration and longer holidays have been reduced by quarantine measures, city tourism has been more significantly impacted given its traditionally shorter trip duration.

EY also noted that city tourism relies heavily on business tourists travelling for meetings, conferences, and events, the majority of which were cancelled due to public health restrictions. 

It said this market, which is responsible for more than one in every six hotel nights in Ireland, continues to be challenged.

Simon MacAllister, Strategy & Transactions Partner for EY Ireland, said that regional hotel occupancy was supported by domestic tourism over the summer months, especially on the island of Ireland where quarantine measures were introduced. 

"The coming months are expected to remain challenging given the on-going restrictions and the difficult economic environment," Mr McAllister said. 

However, EY noted that savings deposits were up 10.9% on an annual basis in September and said this represents a significant recovery potential for the tourism sector in the years ahead.

"Good news on vaccine development and quick testing methods operating at airports, allow for tourism recovery hopes in the medium term. In the short-term however, existing hospitality businesses will depend on the continuity of government supports," EY stated.