A "financing crisis" facing the Irish hospitality sector will threaten the long-term future of the country's tourism industry if the government fails to act, according to the Irish Hotels Federation (IHF).

IHF president Matthew Ryan told more than 200 delegates at a special meeting of members recently that the Irish government will have to take urgent action to address a number of issues that could have severe implications for hotels and guest houses. Surplus capacity, difficulties obtaining bank finance to survive the effects of the recession and excessive local authority charges are among a number of issues that the IHF claims must be addressed in order to provide better support for the sector.

The federation is also calling upon the government to allow hotels to participate in a new Employment Subsidy Scheme to encourage the retention of skilled workers within the industry and to improve competitiveness. "Our members are struggling to deal with decimated revenues while their cost bases have yet to adjust to the economic reality on the ground," said Ryan. "Following years of substantial investment, we have an excess capacity of 12,000 bedrooms which is now exacerbating the situation.

"We are calling on the government to intervene and facilitate an orderly restructuring of the sector in a way that is sustainable and allows our members to continue to be major employers and contributors to the Irish economy."