Property advisor, Savills has today predicted a 32% drop in Dublin’s hotel development pipeline as a direct result of COVID-19. It is estimated that 4,000 new hotel bedrooms have been added to the city’s stock over the past 10 years, with over 80% of these coming on-stream in the past 3 years.
However, from March 2020 to the end of 2022, Savills has reduced its forecast supply of new hotel bedrooms in Dublin by 32%, to just over 4,000, with over half of those expected in 2021.
The hotels which we forecast might open in 2022 are at early stages of construction, therefore Savills has significantly reduced its overall forecast for that year. With a reduced development forecast for Dublin hotels, Savills believe new hotel development in Cork, Galway, Limerick and regional Ireland will be more difficult to deliver in the coming years.
Savills say the probability of opening is greatest for hotels that are already significantly completed, with a greater risk of delay and repurposing for sites that have not commenced, or are in the very early phase of development.
For the balance of 2020 openings (1,150 bedrooms), over 90% of these new hotels have the top floor in place, or have full facades/glazing in place. However, if construction sites are closed for longer than expected, Savills say some of these hotels could slip into 2021.
Speaking this week, Director of Hotels at Savills Ireland, Tom Barrett said, "Just a few weeks ago, before the current restrictions, Savills visited Dublin hotel construction sites to observe physical progress. Based on these visits – and our own analysis – we expect hoteliers, developers and investors will complete most projects that have commenced construction, although the delivery and opening dates will slip."