Crowe Horwath, leading advisors to the Irish hotel sector, have today launched their 21st Annual Ireland Hotel Survey today which shows substantial improvements in the Irish hotel sector.
The Crowe Horwath Annual Ireland Hotel Industry Survey 2016 provides the most comprehensive analysis available of the financial performance of Irish hotels and is the only published report which provides details of profitability in the sector.
The report breaks down the performance of Irish hotels both by region (Dublin, Midlands and East, South West and the Western Seaboard) and by classification (luxury, first class, mid-price and economy). The analysis features room occupancy average; average daily room rate; revenue per room and profit before tax per available room.
The report reveals that key performance metrics have improved for the fourth year running with Dublin outperforming other regions. However, hotels outside the capital reporting better performance levels, the Midlands and East region primarily driven by a 19% increase in non-accommodation sales which contributed to bumper profit levels.
The headline national average room occupancy level for 2015 stood at 71.1%, up from 67.8% on the previous year with the average room rate charged across all hotels in Ireland at €92.15, up from €82.29 in 2014.
Dublin hotels lead the recovery in the sector with the Capital’s hotels showing occupancy levels at 80.7% up from 77.2% in the previous year. The average rate charged for a room in Dublin is now €111.83, up from €97.25 on the previous year, representing a 13% increase.
Room rates in the capital are €8.55 off 2006 peak prices of €120.38, the average nightly cost per room is significantly ahead of other regions (€84.20 in Midlands & East; €84.71 in South West; and €74.20 in Western Seaboard).
According to the report, the Capital in particular is suffering from capacity constraints with occupancy levels at 85% for 6 months of 2015 – this is a clear sign that new supply is urgently needed. There are signs too that increased profitability in the Cork area makes a business case for building new hotel stock in the region.
Partner at Crowe Horwath, Aiden Murphy said, "2016 looks very positive and is set to deliver another year of growth for the Irish hotel market as overseas visitor numbers increase and employment the economy improve further."
He added, "However, the effect Brexit and the recent slip in sterling rate will have on the Irish market in 2016 is relatively unknown. Travel plans are unlikely to be changed for 2016 but future visitor numbers could be affected. As sterling weakens the UK market will start to feel the full impact of increases in Dublin rates and UK visitors may opt for other more competitive sterling destinations."
Source: www.businessworld.ie
