350 new hotel rooms coming to Belfast in 2023 could curb industry growth, report finds

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Belfast hotels had a strong performance between January and September this year, according to a report released today, although challenges loom.

Consultancy firm PwC’s annual UK hotel forecast said post-pandemic demand had led to a successful year for many hoteliers and, in Belfast, hotels had seen a doubling in revenue per available room compared to 2021.

But PwC has warned that the opening of 350 new hotel rooms in the city next year could mean the suppression of growth.

Average daily rates also increased by 10% and occupancy increased by 84% year-over-year, both exceeding 2021 levels. However, occupancy rates were still below 2019 levels.

PwC has warned that the arrival on the market of 350 additional rooms in 2023 – across three new hotels including The Moxy Hotel in the Cathedral Quarter and the Room2 aparthotel on Queen Street – could dampen growth.

PwC also warned that the industry was also being hit by inflation, energy costs, rising interest rates, staff shortages and supply chain disruptions.

David Strachan, Director of PwC Northern Ireland, said: “The Northern Irish hospitality sector has shown great resilience, rebounding strongly from the challenges of Covid-19.

“In particular, the last quarter, to the end of September 2022, saw some of the highest occupancy rates and average daily rates in the industry, which is fantastic to see. Looking ahead, there are bright spots for the industry, including Belfast being crowned the world’s top conference destination for the second year running, highlighting the fantastic facilities and services available across the region.

“Of course, there are headwinds to contend with, not least through inflationary cost pressures, particularly in gas and electricity, which will require the sector to continue to demonstrate strong levels of resilience.

“Twenty-Three is expected to see around 350 additional rooms added to the market, with the opening of three new hotels, demonstrating the continued confidence of investors in the sector locally.

“However, this additional supply could lead to a cooling of occupancy levels and average daily rates in the short to medium term.”

PwC said hoteliers should seek to mitigate the impact of inflation on costs such as energy, staff and supply chain, even lowering water temperatures for hotel guests. hotel.

“Although hotels will be helped by Northern Ireland’s energy bill relief program for non-domestic customers, which is currently only expected to last until the end of the first quarter of 2023.

“Hotels should look to other energy reduction measures such as reducing room and water temperature in the short term or invest in solar energy measures that will reap benefits longer term.

“PwC also suggests reviewing manual processes that can be digitized, such as payroll or customer service measures such as self-service check-in and check-out.”

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