Irish Hotel Federation concerned about the future

The Irish Hotel Federation has today expressed concerns about the announcement from Lloyds Bank that its Bank of Scotland Ireland offshoot is to close. The Federation confirmed that Bank of Scotland Ireland provides around 20% of current outstanding loans to the Irish hotel sector and as such around 150 hotels are under significant financial threat. So what can the authorities do?

There is no doubt that the withdrawal of Lloyds Bank from the Irish financial markets will have an impact in the short to medium term and businesses will suffer. The Irish Hotel Federation is calling upon the government to introduce some form of "guarantee" scheme to protect the sector while other lenders look to fill the void left by Lloyds Bank. Whether the authorities are willing and able to put in place such a scheme remains to be seen but the hotel industry in Ireland is certainly about to feel the pinch.

This could not come at a worse time for the Irish economy which is struggling to pull free from the financial mess of last year which saw the government step in to effectively bailout a number of Irish banks and inject capital into the money markets. Whether the withdrawal of Lloyds Bank will leave a long-term scar on the financial landscape of Ireland remains to be seen.