Dublin digs in
As Ireland's economic fortunes took a dramatic step forward in the 1990s, the tourist industry followed close behind and members of the hotel industry jostled for a presence. Now, as the economic downturn starts to bite, Helen Adkins asks if they can weather the storm.
You can't go far in Dublin without hearing about the celebrated "Celtic Tiger", the oft-used phrase describing Ireland's tremendous economic growth since the early 1990s. But while the phrase may be tired, the reality is that Dublin has undergone a seismic shift over the past 10 years, bringing prosperity to the capital, reversing the tide of emigration and creating a dynamic cultural and commercial centre.
Regeneration game
Dublin has benefited greatly from the investment in the city's infrastructure by the European Union since 1988. Improvements to roads, pedestrianisation of streets, and restoration of historic buildings, galleries and museums all contributed to its regeneration. In 1991 it was named European City of Culture.
Along with the successful IT and pharmaceutical sectors, large-scale development in the city attracted further investment. The International Financial Services Centre (see below) is a IR£20m (£15.84m) development in the city's docklands which has helped to regenerate the Irish economy. Many of the world's top banks and financial operations now operate from the IFSC and 11,000 people work there.
In addition, the deregulation within the European Union gave budget airlines the opportunity to sell cut-price flights to Dublin from a variety of European destinations. As a result, tourism has increased by 103% since 1990 and a record 6.3 million overseas visitors are reported to have visited Ireland's shores last year.
It hasn't taken long for the hotel industry to mirror the city's fortunes. Expansion of existing hotel groups, along with many new arrivals, has succeeded in doubling the number of beds in Dublin to 30,000 in five years. Dublin is now behind only London, Paris and Rome in terms of bednights (the total amount of visitors multiplied by the length of stay).
Jurys hotel group has been in Dublin for more than 100 years, but began its expansion programme only in the early 1990s when it started to build and acquire premises in the UK and Ireland. In 1998 the group acquired the Doyle hotel group, renamed itself Jurys Doyle hotels and virtually doubled the company overnight. The company now has 17 hotels in Ireland (11 in Dublin) 11 in the UK and three in the USA.
Chief executive Pat McGann says the change in the Irish economy created the demand for more beds, which in turn boosted the tourist market. "In 1993 the city had about 5,500 rooms, which was too small for a capital city," he says. "It caused a bottleneck for the rest of Ireland because if tour operators couldn't get into Dubin, they wouldn't come to Ireland.
"The change in the economy meant there was a greater level of corporate activity, more conferences, and business created through the European Union. It made a huge difference to the landscape of Dublin and how we were perceived as an international city."
The strength of the Tiger has attracted many hotel groups over the past few years. The Merrion opened its doors in 1997, offering 145 five-star luxury rooms with 20 suites, spa facilities, a Michelin-starred restaurant and rack rates starting at IR£280 (£222). The five-star Westin hotel, part of the Starwood group, opened in September with 163 rooms, 13 suites, and a prime location on College Street.
In the residential area of Ballsbridge, the 259-room Four Seasons officially opened in February 2001 with five stars and with rates starting at IR£280 (£222). "The company wanted a hotel in Dublin for five or six years," says John Brennan, general manager. "It was part of a cohesive European expansion that included the Four Seasons in Milan and Berlin, the Georges Cinq in Paris and a second hotel in London's Canary Wharf. We recognised there is a huge interest in Ireland as a destination. A lot of clients staying in our hotels around the world represented a strong potential base of business for the hotel when it opened."
While Brennan will not give exact figures, business was reported to have been good since the opening, with occupancy figures in line with projections. The loss of business after 11 September, however, was "significant in the short term", with cancellations coming predominantly from the USA or from parties with North American interests or involvement. Brennan says those bookings have been rescheduled for two to three months' time.
Most hotels in Dublin have, predictably, reported a downturn since 11 September, yet many remain cautiously optimistic. Enda Mullin, general manager of the Westin, says that being part of the Starwood group with 28 sales offices throughout the world, a preferred guest programme with no blackout dates and central reservation offices, gives the hotel the advantage in generating new business. The Westin received group cancellations immediately after 11 September, but Mullin reports that many bookings are being rescheduled for later in the year.
Despite the apparent confidence among hoteliers, however, John Brown, senior public relations officer for the Irish Tourist Board (Bord F ilte), says tourism and hotels have had a difficult year. Foot-and-mouth, the global downturn in the economy and the events of 11 September have all taken their toll on tourism. Most affected is the North American market, which spends an average of IR£550m (£436m) a year and makes up more than a quarter of overseas revenue for the country. He estimates a drop of IR£200m (£158m) in foreign exchange earnings for 2001, the first time Ireland has not experienced growth in that area for 15 years.
"The Americans are our highest spenders and God knows how many we are going to lose in the next 12 months," he says. "It's easy to get a handle on how many US visitors are coming in over the next few months, but we are far more concerned about medium to long term. The airlines are clear cut about what they think and are cutting 25% of flights."
Despite the downturn, saturation of the hotel market, an accusation aimed frequently at Dublin's hotel business is strenuously denied by those who believe in its potential for growth. With a third phase still in construction, an estimated 17,000 people will be working in the IFSC within the next two years, while a further 6,000 will move in as residents.
At present there are two hotels vying for business within the development. Jurys Inn Custom House has 239 rooms and opened in 1996, while the Clarion, Dublin's first "lifestyle" hotel, with 147 rooms, a spa and nine meeting/conference rooms, opened in February 2001. Both hotels hope to cash in on the increased trade once the development is complete.
Brendan Curtis, general manager of the Clarion, reports that occupancy is at 80% and is confident he can maintain that in its second year of operation. "We estimate that every day there will be 500 bednight requirements from this area," he says. "Currently a lot of that goes over to the south side of the city to stay in other hotels. We aim to get our fair share of that market."
Reality check
He adds: "I think the industry will be in for a tough time, but like in every company a situation like this brings out different skills in different people. It's going to be a reality check in terms of wages and costs, but we aren't so dependent on the US market."
Like the Clarion, Jurys Doyle hotel group is less dependent on the US market than some, yet McGann admits it's been a bad year for the group. Profits were 6% points below projected growth patterns and there was a marked slowdown for July and August. But having been with the company for 12 years, he isn't too worried about the future.
"We will weather the storm. If you look at the history of tourism over the past 40 years we have had terrible times at the beginning of each decade - in the sixties, seventies, eighties and the nineties when we had the Gulf war. It seems to be an emerging pattern. We will get through this and be out of it again flying - no question."
The Westin
College Green, Dublin 2
Rooms: 163/13 suites
Opened: September 2001
The Merrion
Upper Merrion Street, Dublin 2
Rooms: 145/20 suites
Opened: October 1997
The Four Seasons
Simmonscourt Road, Ballsbridge, Dublin 4
Rooms: 259/13 suites
Opened: February 2001
Jurys Inn Custom House
Custom House Quay, Dublin 1
Rooms: 239
Opened: September 1996
The Clarion
Excise Walk, IFSC, Dublin 1
Rooms: 147/17 suites
Opened: February 2001
Jurys Ballsbridge
Pembroke Road, Dublin 4
Rooms: 300/three suites
Opened: 1972
The IFSC
The International Financial Services Centre (IFSC) was established in 1987 to develop an international financial services industry which would create sustainable employment and regenerate the docklands area of Dublin.
Recognising that Ireland had the capacity to develop such an industry because of its strong financial infrastructure, sophisticated internal and international communications system and young, educated workforce, the government established the Dublin Docklands Development Authority in 1987 and work began the following year.
Thirteen years later it has become the fastest-growing centre of its kind in Europe and a world-recognised centre of excellence in the international trading of financial services. Many of the world's top banks and financial institutions have operations based there, from banking and asset financing, fund management, futures and options trading to life insurance and reinsurance.
The overall IFSC area is now 15.8 hectares (39 acres) with almost two million sq ft of office space, the Clarion and Jurys Inn Custom House hotels, two bars/restaurants, a large residential development, retail and crèche.
Tourism to Ireland
Number of overseas tourists in 2000: 6.3 million
British: 3,498,000
Mainland European: 1,451,000
North American: 1,059,000
Rest of the world: 264,000
Expenditure by tourists to Ireland in 2000: IR£3b (£2.38b)
Jobs supported by tourism in 2000: 145,000
Total foreign exchange earnings 2000: IR£2.9b
