A new study by Savills Ireland has found that hoteliers and developers are planning 600 new hotel bedrooms for delivery in Galway from 2020.
According to Trending.ie, in 2016 Galway hotel occupancy was over 74%, up from 69% in 2013. Over the same period, average room rates grew from €72 to €95, which was €10 ahead of Cork City. During the peak summer months of 2017, Galway hotels had a vacancy rate of only 5% and this strong demand has helped Galway outperform Cork.
Savills say that compared to other cities, Galway has seen fewer hotel transactions. However, the recent sale of the 261 bedroom Radisson Blu Hotel for approximately €50m to MHL Hotels – and the examinership process of the G-Hotel and Meyrick – are a strong indicator of the demand for properties in the city.
There are 3,218 rooms in Galway City as of 2017 and, if all proposed hotel projects are completed, the hotel bedroom supply in the Galway market will increase by 20%. However, Savills do not envisage all of the speculative Galway hotel projects progressing.
According to Savills, the majority of the proposed development is planned from 2020, with very little due for delivery before then. Unlike previous years, hotel development will be focused in the city versus out of town locations.
Speaking this week, Associate Director of Hotels & Leisure at Savills Ireland, Aaron Spring said, "Development finance remains difficult to secure, coupled with strong build cost price inflation. However, the aspiration for new hotel development in Galway remains strong – and with good reason. Galway has traditionally enjoyed many high season events – such as the Galway Races, Arts Week etc. but current occupancy levels indicate demand is becoming less seasonal."