Rising insurance costs hit hotels in Northern Ireland and the Republic of Ireland last year, according to two reports on the regions.
In the Republic, the cost of insurance increased by 27%. In the north, rises ranged from 10% to 50%.
A survey by consultant ASM Horwath found that an increase in hotel bedroom numbers in Northern Ireland was not matched by a corresponding boost in demand. This sparked a round of price cutting, and the hike in insurance premiums eroded overall profitability.
Average sales dropped by 9% and average pre-tax profit fell by 16.7% to £5,580 per room. This followed a 5.5% decline in average rate to £51.59 and a 1.5 percentage point slide in occupancy to 54.1%
Room supply grew by 7.5% to 5,696 bedrooms, and the number of bedrooms sold grew by 6.6% to 1.07 million.
A second survey by consultant Horwath Bastow Charleton found that hotels in the Republic suffered marginal drops in average room rates and occupancy.
Occupancy fell from 65.9% to 64.8% while average rates were trimmed from €88.35 (£62.32).
* In the past three years, the average cost of insurance for hotels in the Republic has risen by 351%, according to the Irish Hotels Federation.
Source: Caterer & Hotelkeeper magazine, 21-27 August 2003