NAMA will destroy the older established Hotels

Cassandra Syndrome

Well-known member
Joined
Aug 23, 2009
Messages
16,885
The Neo Keynesian fraudulent market externality called NAMA will crucify an already struggling Hotel sector as it will support and subsidise the newer Hotels that were built that come under its wing in the New Year. Normal market forces would close these places as they have huge mortgages and established long existing ones should survive. However NAMA will support the new ones and will therefore keep prices artifically low and will bankrupt the older hotels.

The fusion of corporation and state happened before. Mussolini did it it in Italy during the 1930s. It was called Fascism. Thats 21st century Ireland for you, Neo Feudalist Fascism.

Hotels hit as guests refuse to eat in - National News, Frontpage - Independent.ie
 


MPB

Well-known member
Joined
Nov 27, 2009
Messages
4,455
The Neo Keynesian fraudulent market externality called NAMA will crucify an already struggling Hotel sector as it will support and subsidise the newer Hotels that were built that come under its wing in the New Year. Normal market forces would close these places as they have huge mortgages and established long existing ones should survive. However NAMA will support the new ones and will therefore keep prices artifically low and will bankrupt the older hotels.

The fusion of corporation and state happened before. Mussolini did it it in Italy during the 1930s. It was called Fascism. Thats 21st century Ireland for you, Neo Feudalist Fascism.

Hotels hit as guests refuse to eat in - National News, Frontpage - Independent.ie
I could not agree more. I am in the tourism sector and this is going to be a major issue.

When you think that the newer Hotels are going to be run on the cheap just to sustain them for a tax break, you will see a reduction in the quality of service and the destruction of a brand that has taken decades to build.

This will have serious long term consequences.
 

eyeswideopen

Active member
Joined
Nov 6, 2009
Messages
260
The incentives were a disgrace. The tax should be clawed back.

Should the Government not be supporting promotion to get as many overseas tourists here as possible, and to help find viable alternative uses for some of the new hotels ?
 

hammer

Well-known member
Joined
Jul 6, 2009
Messages
58,180
Tax relief for the investors should be clawed back tomorrow. The cash flow of most of these new hotels cannot be sustained. How many operators have now gone out of business and phoenix like have re-appeared as a new hotel management company. This goes against the principle of the tax break.

If the existing hotels want to survive they need to cut staff back to the bone. Maybe do a deal with regard to wages. They need to keep the customer in the Hotel eating, drinking, reading etc........maybe a library room !!!

Undercut the NAMA hotels. Provide better service. VICTORY
 

hammer

Well-known member
Joined
Jul 6, 2009
Messages
58,180
Do a deal with the local golf courses. They are struggling too. €20 / €30 a round of golf or some figure that is reasonable to both customer & golf course
 

nuj

Well-known member
Joined
May 26, 2004
Messages
518
The Neo Keynesian fraudulent market externality called NAMA .....]
Agree on the hotel issue, but can't agree with your phrase "Neo Keynesian". Keynesian would imply a state stimulus to restore health, NAMA is merely costly respite care.
 

Digout

Well-known member
Joined
Oct 2, 2008
Messages
1,389
Yup, the FF gombeen have removed the old school from the industry.
 

Cassandra Syndrome

Well-known member
Joined
Aug 23, 2009
Messages
16,885
Agree on the hotel issue, but can't agree with your phrase "Neo Keynesian". Keynesian would imply a state stimulus to restore health, NAMA is merely costly respite care.

NAMA is being proclaimed as a stimulus for the economy. But it is a negative market externality. Its like the tax credits in the States to prop up the housing market for a couple of months. But it will fail too at expense to others. These exercises are like trying to prop up a rock with toothpicks.
 

nuj

Well-known member
Joined
May 26, 2004
Messages
518
NAMA is being proclaimed as a stimulus for the economy. But it is a negative market externality. Its like the tax credits in the States to prop up the housing market for a couple of months. But it will fail too at expense to others. These exercises are like trying to prop up a rock with toothpicks.
But it's being wrongly proclaimed as such. Ex-NAMA, it's reasonable to assume that property prices - of whatever type - might have reached some sort of clearing price, with some consequent activity, and hence revenue for State. For example, 50 houses changing hands at €100k is a damn sight better for tax revenue than none changing hands at €300k.
 

Mitsui2

Well-known member
Joined
Nov 13, 2009
Messages
32,378
I could not agree more. I am in the tourism sector and this is going to be a major issue.

When you think that the newer Hotels are going to be run on the cheap just to sustain them for a tax break, you will see a reduction in the quality of service and the destruction of a brand that has taken decades to build.

This will have serious long term consequences.
My hotel experience is only as a guest but then in the bigger picture this is far more than a matter of hotels: it's simply one more tax scam whose malign influence is battering the real economy and, more importantly, real people's real lives.

The scams on behalf of rich supporters that Bertie & co perpetrated - everything from this to the building boom's contrbutions to recent floods - are like an entire flock of chickens coming home to roost all at once.
 

eyeswideopen

Active member
Joined
Nov 6, 2009
Messages
260
Tax relief for the investors should be clawed back tomorrow. The cash flow of most of these new hotels cannot be sustained. How many operators have now gone out of business and phoenix like have re-appeared as a new hotel management company. This goes against the principle of the tax break.

If the existing hotels want to survive they need to cut staff back to the bone. Maybe do a deal with regard to wages. They need to keep the customer in the Hotel eating, drinking, reading etc........maybe a library room !!!

Undercut the NAMA hotels. Provide better service. VICTORY
They need to GET MORE GUESTS IN.

Tourism is the one sector in which we can get people from less crippled economies to come here and spend their money.

Perhaps we could market ourselves as a disaster destination, a bit like Belfast used to do.
 

Cassandra Syndrome

Well-known member
Joined
Aug 23, 2009
Messages
16,885
My hotel experience is only as a guest but then in the bigger picture this is far more than a matter of hotels: it's simply one more tax scam whose malign influence is battering the real economy and, more importantly, real people's real lives.

The scams on behalf of rich supporters that Bertie & co perpetrated - everything from this to the building boom's contrbutions to recent floods - are like an entire flock of chickens coming home to roost all at once.
Fully agree. I just wanted to highlight the issues of the hell the hotel owners who have been operating for decades many through the 80s are going through. There is only a select small percentage of society who are breezing through all of this and we know who they are.
 

KingKane

Well-known member
Joined
Aug 19, 2003
Messages
2,322
Website
www.danielsullivan.ie
Twitter
kingkane
The Neo Keynesian fraudulent market externality called NAMA will crucify an already struggling Hotel sector as it will support and subsidise the newer Hotels that were built that come under its wing in the New Year. Normal market forces would close these places as they have huge mortgages and established long existing ones should survive. However NAMA will support the new ones and will therefore keep prices artifically low and will bankrupt the older hotels.

The fusion of corporation and state happened before. Mussolini did it it in Italy during the 1930s. It was called Fascism. Thats 21st century Ireland for you, Neo Feudalist Fascism.

Hotels hit as guests refuse to eat in - National News, Frontpage - Independent.ie
"IHF Chief Executive John Power suggested that barely functioning hotels under NAMA's remit could be transformed into nursing homes or hospital step-down facilities, as there was a massive over-supply of rooms."

Good idea, and it was a good idea when I suggested four months ago!

Sharing pain of economic crisis - The Irish Times - Tue, Aug 18, 2009

A pity that the IHF wouldn't acknowledge that the idea came from an average punter who isn't part of the industry.
 

stanley

Well-known member
Joined
Jun 20, 2007
Messages
9,506
They need to GET MORE GUESTS IN.

Tourism is the one sector in which we can get people from less crippled economies to come here and spend their money.

Perhaps we could market ourselves as a disaster destination, a bit like Belfast used to do.

Perhaps Lenny should increase the Airport Tax to £25-00, on the basis of his logic, he would get a better /wealthier kind of customer.
 

MsAnneThrope

Well-known member
Joined
Apr 8, 2009
Messages
1,807
Banking system must face up to threat

* bump *

The Irish Hotels Federation (IHF) Annual Conference is taking place in Galway right now. They just issued the following Press Release: BANKING SYSTEM MUST FACE UP TO THREAT CAUSED BY INSOLVENT HOTELS

Failure to foreclose on insolvent hotels is damaging to the long term interests of the tourism and hotel sectors. The lack of foreclosure against fundamentally insolvent hotel businesses is now undermining the remainder of the sector, including businesses which are fundamentally competitive and sound. [...]

Hotels that are in receivership and are effectively run by banks, or where the ownership of the businesses has been taken over by banks or their nominees are, through their practices of deep discounting of prices, undermining the long term viability of an industry which employs about 54,000 people.

This is borne out by the findings of an IHF survey carried out in February which reveals that some 70% of hotels and guesthouses saying they have experienced unfair competition from otherwise unviable hotels being supported by banks. [...]

“We are living in a fool’s paradise if we believe that the offering of deep discounted and below cost hotel room prices will be a long term benefit to the economy. The industry will not survive in such circumstances. Businesses which could be viable, even with a struggle, are being driven into insolvency by the facilitation of the continuing trading of competitors who are not meeting the basic requirements of covering their costs and servicing their debts. This is resulting in hotels being unable to invest in maintaining standards and the Irish tourism industry will suffer irreparable damage, if these conditions are allowed to prevail,“ Dr Bacon stated.

“All barriers to exit from the hotel sector should be removed, particularly the overhanging risk of claw back or the tax benefits of capital allowances, that have already been claimed in respect of any hotel, where that hotel ceases to trade within its seven year tax life. Banks should be forced by the Regulatory system to recognise the losses on loans to insolvent hotel properties, and should be forced to foreclose on these properties if necessary. If these properties cannot be disposed of to a business which is properly funded and capable of servicing its borrowings, they should be set aside and closed down.

“Burying heads in the sand and hoping that the market will recover is undermining the stability of the entire hotel industry. At current rates of hotel occupancy of close to 50 per cent, there is little likelihood that the removal of overcapacity will lead to upward pressure on room prices, rather, occupancy rates would tend to rise, supporting the viability of competitive enterprises remaining in the sector.”
The Irish Times also covered this issue yesterday: No easy fix for zombie hotels but Nama needs one fast

The real issue – from the IHF’s perspective – is the large number of smaller hotels that have sprung up around the country over the last 10 years, most of which were built primarily to avail of generous tax breaks that could be used to shelter the super-normal profits being made by developers.

The use of hotel-based tax breaks by developers as part of their overall tax planning meant the hotels are knitted into their overall portfolios, and thus will transfer to Nama at some point.

The truth is that many of these hotels should never have been built, and some are now little more than zombies,the IHF says.

Even though they are loss-making, their owners cannot close them, because they will then lose the tax breaks and face a clawback they cannot meet.

The banks will not close them either because they don’t want to have to write off the loans. They would rather transfer them into Nama at their long-term valuation, and take a smaller hit.

An unknown number of these hotels are limping along, undermining the viability of more established hotels. The IHF reckons that 15,000 rooms need to go to take the excess capacity out of the system. And it wants Nama to do it, surgically removing the non-viable deadwood hotels. [...]

What Nama should do is ensure that the market works a bit better. That means taking hotels off the banks’ books as quickly as possible and closing the zombies. That means getting a move on.
So Lenihan is faced with a choice: "undermining the long term viability of an industry which employs about 54,000 people" (says the IHF) or ignoring the problem to benefit the small handful of the new, tax-break developer entrants into the hotel industry. Over to you Mr. Lenihan...
 

Digout

Well-known member
Joined
Oct 2, 2008
Messages
1,389
SCAMA will support the insolvent hotels, very unfair on the people who have been in the business for years.
 

He3

Moderator
Joined
Oct 1, 2008
Messages
17,077
So Lenihan is faced with a choice: "undermining the long term viability of an industry which employs about 54,000 people" (says the IHF) or ignoring the problem to benefit the small handful of the new, tax-break developer entrants into the hotel industry. Over to you Mr. Lenihan...
He will stick to the version of NAMA that he and his advisers have dreamt up for unknown reasons, even as it continues to eat its way through the economy like a flesh-eating bug.

Elaine Byrne is the latest to point out that mainstream opinion is pointing in a very different direction.

Should Ireland's citizens refuse to bail out the banks? - The Irish Times - Tue, Mar 02, 2010
 

MPB

Well-known member
Joined
Nov 27, 2009
Messages
4,455
SCAMA will support the insolvent hotels, very unfair on the people who have been in the business for years.

Take a look at the thread on Gerry Gannon still receiving Govt. contracts despite him being one of the first 10 into NAMA.

NAMA is going to distort every market that involves a building structure and the NAMAites are going to get prefferential treatment as they have to be kept afloat so that they can be seen to be servicing their loans, even partially.

I myself am affected by the Hotel situation but I am probably lucky enough to be a smaller operation and therefore I exist in a market where I do not compete directly but it has filtered down and I have to compensate.

Price is not the only issue the type of product and service now being offered by NAMA owned entities will have a harmful impact on how we are perceived by the market place.
 

irishpancake

Well-known member
Joined
Apr 5, 2007
Messages
17,690
How come this Bacon fellow pops up everywhere?

He is obviously a "gun for hire", who will make a case for either side, depending on who pays him.

He was interviewed on RTE Morning Ireland yesterday, and no-one mentioned that he was a paid consultant for the Irish Hotels Federation.

His pontificating was allowed to proceed unchallenged by the interviewer, who not once mentioned the simple fact that this Bacon man was giving a very subjective point of view, which was that of the Hotel Federation.

I for one am sick of this man, who was the author of the NAMA for Lenny.

Let's hear some real independent viewpoints, not those who are paid by VI's to give a spin.
 

johnfás

Well-known member
Joined
Feb 22, 2007
Messages
2,715
There's alot of nonsense coming from the hoteliers about how cheap they are - the "cheapest in Western Europe" they tell us. I have had cause to book alot of hotels across Europe over the past number of months. While Dublin may now be cheaper than Paris, London and Berlin - it is still possible to get a 5 star in the likes of Prague and Madrid for less than a 3 star in Dublin. Our market is not competing with London. Ireland needs to throw off its delusions of grandeur and start competing in its market, on price, to get more tourists into this country - then the profits will return.
 


New Threads

Popular Threads

Most Replies

Top