Irish hotel transactions in 2023 reached €350m according to Savill’s, 30pc below the historical average, primarily due to fewer sales and investments in Dublin.
Dublin’s hotel supply remained constrained, with only 1,200 rooms added in 2023. There was no single hotel sale for €50m or more in 2023, but Savills say regional transactions were very strong.
Regional hotel transactions, however, remained strong, driven by attractive yields, strong trade, and higher replacement costs compared to Dublin.
Dublin’s hotel occupancy in 2023 surpassed 80pc, returning to pre-pandemic levels, and the average daily rate (ADR) was 27pc higher than in 2019.
Hotels have become a mainstream property investment class, with ownership by institutions such as Aviva, Blackstone, Deka, DWS, and Union.
Emergency accommodation and contracted beds for longer-term business were significant factors in Dublin, while regional Ireland saw occupancy heightened by government contracts.
The hotel pipeline in Ireland is expected to grow at an average rate of 3.0pc per year, leading to over 30,000 hotel rooms in Dublin by 2029.
Despite challenges such as VAT rate increases and rising energy costs, there are prospects for RevPAR growth with a slowdown in new hotel openings and an increase in inbound travel.
