Hotel room occupancy rates over the first ten months of the year remain down on the same period in the year before the Covid-19 pandemic struck, despite the recovery in tourism this year.

Average occupancy rates between January and October stood at 71% nationally and 75% in Dublin, a new survey of Irish Hotels Federation (IHF) members has found.

That compares to 80% and 84% respectively over the same ten months in 2019.

"We are now heading into very turbulent times economically with growing uncertainty in our overseas markets," said Denyse Campbell, president of the Irish Hotel Federation.

"This comes at a time when escalating business costs are eroding confidence among hoteliers."

"Energy costs are a particular worry and are now running at 10-12% of total revenue for the average hotel, up from just 4% of revenue in 2019."

"For an average 70-bedroom hotel this means an increase of €380,000 in annual energy costs."

IHF members are also concerned about the outlook for next year, the data shows, due to the economic downturn and low consumer confidence.

38% of respondents said they are worried and 56% are very concerned, the survey found.

60% of hotels reported that their bookings for Great Britain for next year are down compared to 2019, while 38% said reservations from the rest of Europe are lower.

However, hoteliers said the US market was looking more balanced, with a third saying they have seen an increase in booking from there, and the same recording a decrease.

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Despite the Government helping hoteliers with rising energy costs through the Temporary Business Energy Support Scheme, the IHF says qualification criteria is too restrictive, with the cost of food, linen and laundry, beverages and insurance all rising by as much as a third.

As a result, hotels think the Government should not increase the VAT rate for hospitality to 13.5% from the current reduced rate of 9% at the end of February, as is planned.

"The looming increase of Ireland's VAT means that consumers and overseas visitors will be paying the third highest tourism VAT rate in Europe," said Ms Campbell.

"Countries that take tourism seriously, where it is a key part of their economy, have much lower tourism VAT rates."