Hoteliers worried that ‘astronomical’ rise in costs is threatening tourism

Donegal’s hospitality industry is struggling with the  ‘astronomical’ rise in costs in the last three months which is threatening the county’s reputation as a value for money destination, hoteliers in the county have warned.

Despite the county’s tourism industry having just experienced one of its busiest weekends in recent years, hoteliers are warning that rising costs and staff shortages are making it extremely difficult for many to balance the books.

Hotels around the county were at capacity over the bank holiday weekend due to good weather, the extended bank holiday weekend in Northern Ireland and events such as the Rory Gallagher International Tribute Festival in Ballyshannon.

Chair of the Donegal branch of the Irish Hotels Federation Paul Diver said overall the weekend “was quite good” with occupancy back to 2019 levels. But hoteliers across the county are finding spiralling costs “really concerning”.

“Every single thing right across the board from toilet paper to food to energy prices to insurance is rising,“ he said. 

“People are wondering what the cause of it is -  but every single product that a hotel uses is spiralling the wrong way.” 

Mr Diver, who owns the Sandhouse Hotel in Rossnowlagh, said hotels in the county, many of which are family-run businesses,  are trying to absorb the increased costs as much as they can to prevent the price of rooms from increasing.

“Here in Donegal, our core driver is tourism, quality and value for money; and so far that is keeping Donegal good value for money. But if costs keep going the way they are going, it will have to be passed on at some stage [to customers]. There is still great value to be had around the county, and that is critical because that is what our business is proven on - the quality of the product and value for money.”

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Increased costs could lead to customers paying higher prices which in turn could impact the number of visitors coming to the county, he warned.

“Going forward there is still a lot of business to be bought for July and August - there are still a lot of bookings to be made. But up to the end of May, Donegal has had a very busy period - back to 2019 levels.”

The difficulty in hiring staff has also hit the industry, Mr Diver said, with some hotels and restaurants running at 75% of capacity due to staff shortages, meaning potential bookings are being turned down.

“A lot of hotels and restaurants are closing a few days during the week to give staff days off - and that is the new norm, that is the ways things are going to be.”