Demand For Dublin Hotels Needs To Rise To Maintain Profit, Says New Report
A new report that reveals Dublin will get approximately 4,000 new hotel rooms over the next half decade indicates that demand for accommodation in the capital will need to rise by 15% in the next five years if current profit and occupancy levels are to be maintained as the extra capacity comes onto the market.
The Irish Independent reports that 5.6 million hotel rooms were sold in the city in 2016, with an occupancy rate of 82%. However, a further 845,000 rooms would need to be sold annually over the next five years if current occupancy and profitability levels are to be maintained. This is according to the commissioners of the report, business advisory and accountancy firm Crowe Horwath and property services group Cushman & Wakefield.
Crowe Horwath partner Aiden Murphy stated that 3,100 of the projected 4,000 new rooms are planned for the city centre, creating competition that will likely adversely impact hotels in the suburbs due to lower room rates in the city.
Meanwhile, head of the hospitality for the EMEA at Cushman & Wakefield Jonathan Hubbard said that between new hotel developments and extension to established venues, approximately 13,500 are currently in the pipeline for Dublin, with 2,500 planned to come on the market by the end of 2019. Hubbard also stated that this year has been a lot quieter for hotel transactions on Dublin and approximately 9,200 of the 13,500 planned hotel room are being built on a speculative basis.