A new report from global hotel consultancy HVS London has revealed that Dublin is offering a number of new opportunities for hotel developers, particularly in the luxury and economy sectors.
Hotel values continue to rise in Dublin as investment gains momentum, according to the report. This year saw nine hotels with a value of over €7.5m gaining new owners compared with just two sales at that level in 2012.
Furthermore, the report revealed the average room value of Dublin’s hotels rose by 6.6 per cent in 2013 to €179,400, with values expected to rise further to €212,000 by 2018.
Ireland’s hotel sector experienced five years of RevPAR decline following the country’s demise into recession in 2008. A series of measures, including an EU bailout package, has helped the Irish economy experience a return to growth.
After declining by an average 3.4 per cent, average rates at the city’s hotels have grown 4-7 per cent over the past three years with market-wide average rate growth of 7-8 per cent anticipated for 2014, and a rise of three per cent forecast for 2015, the report reveals.
Dublin currently has over 200 hotels, with almost 21,000 rooms, the majority of which are in the upscale (32%) and upper midscale (31%) segments. Average daily rate (ADR) rose by 8.4 per cent this year to €96.19, with occupancy up 2.2 per cent to 78.2 per cent
“Ireland’s return to growth is good news for Dublin’s hotel market although performance is currently still about 10% below previous peaks in 2006,” said report author Arlett Oehmichen, Director HVS London. “While we are unlikely to see a return to previous levels of room rate and occupancy, because a more cost-conscious European visitor is now coming to the city, there is still the potential for further growth and development opportunity in Dublin’s hotel market.”
With upscale properties making up a huge percentage of the city’s supply, there is only one new hotel build in the pipeline, highlighting potential opportunities for economy or luxury development.
“As developers and investors return to Dublin a supply/demand balance could be on the horizon,” added the report’s co-author Louise Fury, Senior Editor HVS London.
“With a positive forecast for the Irish economy and steady increases in visitation, investment and values, Dublin seems to have become a hot spot for investors.”
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