Jun 17 2014 Posted: 09:32 IST

Ireland’s hotel sector continues to face challenges arising from unsustainable levels of overhanging debt according to a new report by Professor Alan Ahearne, of Economics at NUI Galway Speaking at a major investment conference hosted recently by the Irish Hotels Federation (IHF), Prof Ahearne said that, despite substantial progress being made over the last two years, indebtedness remains a pressing issue for many hotels outside large urban areas such as Dublin.

With total hotel debt estimated at €5.3bn (down from €6.7bn at the end of 2011), Prof Ahearne’s report reveals that a further reduction of €1.4 billion is required to bring hotel debt to a sustainable level. This would return hotels to a financial position where they could operate on a long-term sustainable basis and commit to investment in ongoing maintenance, refurbishment, renovation and innovation - and thereby grow employment. Prof Ahearne’s states that part of the solution should involve making funds in the recently announced Ireland Strategic Investment Fund available for investment in hotels that are viable but undercapitalised.