Tuesday, September 25 10:41:02
Dublin is still oversupplied with hotel rooms but most of the hotels built during the boom years are four and five star and so the overall quality of the hotel room stock has risen significantly, according to property specialists Christie + Co, who recently launched in Ireland.
The company specialises in providing brokerage, valuation and advisory solutions on the hotel industry, with their main clients being banks, receivers and funders.
It found that, along with much of the Irish hotel market, Dublin has recently experienced consecutive years of poor performance due to the global economic downturn, a weak Irish economy and severe over-supply of hotel stock in many sub segments of the city following a pattern of extensive development.
Although Dublin city centre is not considered over supplied, a number of outskirts areas are.
According to data released by Failte Ireland, Dublin's registered room stock is understood to be just over 18,500, a 37pc increase on levels recorded in 2005.
"The increase was evident both in quantum and quality, with most of the new additions being in the 4 and 5-star segments. The city's new supply provided a welcome enhancement to the overall quality of the capital's tourist offering, furthering its shaping as a destination for leisure and corporate visitors alike. Since the peak in 2010, supply has decreased slightly, due to the closure of some properties (e.g. the Montrose, the Royal Dublin, Ormond Quay Hotel and Chief O'Neill's which was converted to a hostel)."
The pipeline for new development is weak, Christie's said, with the exception of a recently sold part-completed Docklands hotel which is due to open in Spring 2013 as "The Marker" with 187 rooms.
Although planning has been granted for further hotels in Dublin, we are not aware of any other confirmed new openings. A 450 room hotel which was planned at Spencer Dock would have been a welcome addition to support the CCD however planning permission was refused in mid 2008 mainly due to the height of the building.
Maureen Doyle said that "With a multinational corporate presence, ongoing inward investment and a vibrant tourist economy, demand for hotel accommodation in Dublin remains strong. The city generally experiences strong weekend leisure demand, particularly during the hosting of festivals, concerts and sporting events, whilst mid-week demand is generally related to corporate and group traveller markets and event related business. Seasonally, Dublin's demand peaks from May to September, when occupancy above 80pc can be achieved."
By year-end 2011, an 11.6pc increase in RevPAR was witnessed against results for 2010, however it is important to remember that severe declines were witnessed in 2008 and 2009 therefore all subsequent years are being compared to a low base, said Ms Doyle.
According to data from STR Global, 2011 saw RevPAR growth against 2010 for virtually every month, with February, May and July showing the most pronounced levels, at around 20pc. This strong trading resulted in an overall double-digit increase in RevPAR for the full year with a E6 gain per available room achieved as a result of increases in both occupancy (up 4 ppts to 71.2pc) and ARR (up 5.4pc to E81.61).
For the first eight months of 2012, as roomnight demand (occupancy) has strengthened, hoteliers' yield management strategies have enabled higher rate achievability from both leisure and corporate segments. According to YTD figures, the market has witnessed a 10.7pc lift in RevPAR so far this year, lead mainly by ARR, which saw a 8.1pc growth to reach E87.50.
"This growth can be attributed to a general boost in demand and visitation to Dublin, enhanced consumer confidence, a slight weakness of the Euro against the GBP and USD. The 9pc VAT rate on certain goods and services has also aided the tourism and hospitality industry to regain growth. Initiatives such as 'the Gathering' are also likely to have a positive impact on the hotel market," added Ms Doyle.