Speaking at a joint breakfast briefing on the Irish hotel market in the Conrad Hotel on Thursday 10th November were Aiden Murphy, Partner, Crowe Horwath, Jonathan Hubbard, Head of Hospitality EMEA, Cushman & Wakefield and Stefan Lenze, Head of Development, Motel One. In attendance was over 120 industry guests.
Aiden Murphy noted that since 2012 average room rates are up €47 and occupancy up 12 percentage points; both contributing to an average rise in profit per room of €12,000.
These strong figures have been fuelled by the shortage of hotel rooms – with virtually no additional supply seen during this period.
The theme of the breakfast briefing was ‘What is the impact of new supply on the hotel market?’ which explored the opportunities and challenges facing new hotel projects and the impact of new supply on current profit levels within the sector.
In 2016, 5.6m hotel rooms were sold in the Dublin hotel market at 82% occupancy. With an anticipated additional 4,000 hotel rooms needed over the next five years for the market to just maintain demand it will have to grow 15%, selling an extra 845k rooms by 2021.
Murphy pointed to a key demand factor over the last five years as being the growth in international tourist numbers.
Jonathan Hubbard outlined that 2017 has been a significantly quieter year in term of hotel transactions, with only €87.5m worth of transactions occurring across 23 transactions, 60% below Q3 2016, predominately due to the slowdown of receivership and forced sales. The market has returned to a somewhat “normalised” level.
Stock coming onto the market remains slow - while there are currently approximately 13,500 bedrooms in the planning pipeline, the vast majority of these (9,194) are speculative, with only approximately 2,500 beds due to be delivered by the end of 2019.