Despite challenges including the aftermath of Covid-19, the Ukrainian conflict and inflationary pressures, the Irish hotel industry sector has seen a robust recovery, the latest review from Savills Ireland shows.
Savills noted that 2023 was a period of significant recovery for the Irish hotel industry, with occupancy rates returning to their 2019 levels with even stronger pricing, which it said reflected the industry's "adaptability and resilience".
Tom Barrett, Director and Head of Hotels & Leisure at Savills Ireland, said that while the sector faced cost pressures across various sectors, including payroll and energy, the growth in top-line revenue has largely offset these challenges, making 2023 a positively memorable year for many hotel operators.
Looking ahead, he said the sector has a "cautious yet optimistic outlook" for 2024, with forward bookings indicating strong months ahead, driven by major events such as the UEFA Europa Cup Final and concerts by Taylor Swift and Coldplay.
But surpassing the €326 average rate achieved in Dublin during the Notre Dame v Navy American football game in August of this year remains a challenge, he added.
Today's review shows that despite lower year to date transaction levels compared to the €400m average of recent years, significant activity was noted in regional Ireland, with key transactions including the sale of The Imperial Hotel Cork and several other properties in the €10m to €30m price range.
Savills noted that the Irish hotel ownership landscape remains fragmented.
But along with the large high profile groups of Dalata Hotel Group and Tifco, others continue to expand with Cliste, JMK, MHL, Staycity and TMR all with over 1,000 rooms open, or in the pipeline by the end of 2023.
Looking ahead to 2024, the Irish hotel market anticipates significant transactions, such as the completion of Press Up Hotels' majority stake sale to LHC, the potential sale of Tifco's portfolio and some off-market transactions.
"These developments, along with the ongoing interest in converting office spaces to hotels, underline the sector's attractiveness as a high-potential investment avenue," Savills said.
"With strong cashflows and high barriers to entry, hotel property continues to be an attractive proposition for investors. The industry's adaptability and robust performance, even in challenging times, underscores its potential for sustained growth and resilience," Mr Barrett concluded.
