Hotel values are continuing to rise in Dublin as investment gains fresh momentum, according to a new report from global hotel consultancy HVS London.
The report found that with Dublin's economic recovery well underway the city is now offering exciting opportunities for hotel developers.
According to HVS, this year saw nine hotels with a value of over €7.5 million gaining new owners compared with just two sales at that level in 2012.
Furthermore, the average room value of Dublin’s hotels rose by 6.6 per cent in 2013 to €179,400, with values expected to rise further to €212,000 by 2018.
Ireland’s hotel sector experienced five years of RevPAR (revenue per available room) decline following the country’s demise into recession in 2008.
After declining by an average of 3.4 per cent, average rates at the city’s hotels have grown four to seven per cent over the past three years with market-wide average rate growth of up to eight per cent anticipated for 2014, and a rise of three per cent forecast for 2015.
HVS said Dublin currently has over 200 hotels, with almost 21,000 rooms, the majority of which are in the upscale (32 per cent) and upper midscale (31 per cent) segments.
Average daily rate rose by 8.4 per cent this year to €96.19, with occupancy up 2.2 per cent to 78.2 per cent.
Demand for hotel accommodation has grown slightly faster than supply over the past five years, at 1.1 per cent and 0.6 perch cent respectively, due partly to the decline in development and hotel closures during the recession.
“Ireland's return to growth is good news for Dublin’s hotel market although performance is currently still about 10 per centbelow previous peaks in 2006," commented report author Arlett Oehmichen, director, HVS London.
"While we are unlikely to see a return to previous levels of room rate and occupancy, because a more cost-conscious European visitor is now coming to the city, there is still the potential for further growth and development opportunity in Dublin’s hotel market," he added.
