Foreign investors made up over half of the total number of hotels sold in Ireland in 2014, as Ireland becomes an increasingly attractive place for overseas players to invest.
According to the Irish Hotel Market Review published by DTZ Sherry Fitzgerald (reported by the Irish Independent) the drop in the value of the euro, as well as the forecasted increase in revenue, has piqued the interest of domestic and foreign purchasers.
Last year, according to the report, some 60 hotels were sold in Ireland for a total value of €555 million. Over 50 per cent of that amount was to foreign firms.
US investors still account for the vast majority of these investors, with 87 per cent of the foreign spend (€275 million) coming from them. European buyers comprised five per cent and Asian three per cent.
The Asian investment numbers, however, are predicted to rise in 2015, particularly from China. Kirsty Rothwell of DTZ explains in the report that Chinese activity should increase in 2015, as enquiries from there have risen in recent months.
The report predicts a strengthening of prices as well as an abundant supply of both distressed and non-distressed assets becoming available on the market in 2015, as value returns to the market.
The news comes on the back of other industry reports that have detailed the resurgence of the Irish hotel market in 2014. A report published by PricewaterhouseCoopers (PwC) has predicted that hotel room rates are set to return to their pre-recession peak of €109 a night in 2015.
Also, Hotels.com Hotel Price Index found that the average price of a hotel increased by ten per cent in 2014, up to €103, a figure that was denied by the Irish Hotel Federation.
The DTZ report also warned that although the sector will see improvement, there is still a notable gap between Dublin and the rest of the country, regardless of the hotel standard.
"Investors are willing to pay a premium for well-located three and four star hotels in Dublin city centre, while five star hotels outside Dublin are being acquired for a price per room that is significantly less," said Rothwell.
Some 35 hotels in Ireland are currently in receivership and have yet to be offered for sale, while the IHF claim that one third of hotels will not make a profit in 2015.
