Warning of over-saturation in hotel market if Events Centre doesn’t go ahead

Warning of over-saturation in hotel market if Events Centre doesn’t go ahead

BAM proposed Sullivan's Quay Development -

HOTELIERS in Cork are warning that over-saturation in the market could become an issue if the Events Centre does not go ahead.

According to a recent Irish Hotels Federation (IHF) survey of Cork hoteliers, more than 1,500 new bedrooms are due to come on the market in Cork city in the coming years, providing a 50% increase on the number of existing rooms currently available.

“Whilst this is great news for the city, as it could attract more than 3,000 extra people a day, our survey found that hotels (city and county) are currently only averaging a 74% occupancy rate,” Neil Grant, chair of the IHF Cork branch, said. “Therefore, our members are concerned that the increase could over-saturate the market, if the Cork Events Centre does not get underway soon.”

BAM student apartment development on South Main Street, beside the planned event centre site. Pic; Larry Cummins
BAM student apartment development on South Main Street, beside the planned event centre site. Pic; Larry Cummins

It is now more than three years since the first sod was turned on the South Main Street site but it has been mired in difficulties and negotiations are ongoing about a significant increase in State funding for the project.

“Many hoteliers applied to extend their bedroom capacity or build new hotels on the basis that the Events Centre would attract a significant increase in tourism to Cork,” Mr Grant said. “It is imperative that it comes to fruition and we need absolute confirmation on its delivery as soon as possible. If a big convention of 3,000 people was brought to Cork in November, it would justify the development of the additional bedrooms and would sustain growth of the sector, but if it doesn’t, it will be detrimental to the industry.”

The survey showed that more than €11.5m was spent on renovations and improvements to hotels in the region in 2018, with more than 80% investing in capital expenditure. Individual hotel upgrades ranged from €50k to €2.5 million.

Local hoteliers spent a further €7.5m promoting Cork as a destination nationally and internationally, which was an increase of €2.5m from 2017.

Mr Grant said its members are making huge efforts to now grow their businesses after years of recession, which in turn contributes to the local economy.

“Our hotel members worked extremely hard to overcome the challenges of the last recession and it is fantastic to now see our collective efforts as a sector helping to attract additional tourism business to Cork,” he said. “The substantially increased marketing spend hoteliers are making to promote Cork as a tourism destination is just one aspect of this.”

Identifying the reasons why visitors choose Cork as a destination, hoteliers said the main selling points are corporate business travel, the Wild Atlantic Way and Ireland’s Ancient East tourism routes; food culture, destination hotels, accessibility, scenery, choice of accommodation, attractions like Blarney Castle, Fota Wildlife Park, hidden gems, the people, our vibrant city and the fact that Cork is a gateway to the South.

July to September was the busiest time of year for 96% of properties, and 35% of hoteliers said they believe there is an opportunity to grow business during the first six months of the year.

Cork Airport Terminal, Cork. /Pic Denis Scannell
Cork Airport Terminal, Cork. /Pic Denis Scannell

Growth opportunities identified through the survey for 2019 and 2020 include increased frequency and capacity at Cork Airport, promotion of Ireland’s Ancient East and the Wild Atlantic Way routes, expansion of hotel bedrooms, the corporate market, free entertainment in hotels and the region, and improved facilities.

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