A new survey has warned of a slowdown in the recovery of the Irish hotel industry.
The latest annual ‘Crane Report’, by Deloitte, which surveys building development across residential and commercial properties, called 2023 a stellar year, with an estimated 1,650 new hotel rooms opened during the year.
That level – while a touch down on 2022 output – showed a continued strong recovery and an exceeding of pre-Covid levels; with demand buoyed by air passenger arrival figures and a record level of Irish consumers opting for staycations.
However, the higher hospitality VAT rate and a busier market has thrown doubt over whether the strong recovery can maintain momentum.
John Doddy, head of real estate in Deloitte, said: “There are a number of really encouraging indicators that show the recovery of the hotel market in Ireland, following Covid-19, from construction activity to occupancy rates.
“However, it is uncertain whether this stellar market performance will continue, as occupancy, Average Daily Rate [ADR], and RevPAR [revenue per available room] each recorded a decline in the year to March 2024.
“Initial market soundings suggest a weakening in demand, with hotel groups citing the increased VAT rate and increased competition as key challenges facing the industry in 2024.
“However, several key events – such as Taylor Swift and Bruce Springsteen concerts – will likely bolster performances over the summer.”
As the market improved, a number of new hospitality assets completed construction with more on the way.
An estimated 1,650 new rooms were opened in 2023, and although down from 2022, this represented an improvement on 2019 levels. The majority of these completions were in Dublin, with ReZz, Premier Inn and Travelodge Plus all adding beds to their Irish portfolios.
At the start of 2024 just under 2,850 rooms were under construction across Dublin, Cork and Galway, with the majority due for delivery in 2024.
Over 550 of these rooms were completed in the first quarter, a further 1,080 rooms are due to complete before the end of the year, with the remainder falling into 2025 and 2026.
The completion of new stock over the coming years will bring with it new brands to the Irish hotel market. These include the Hoxton, Citizen M and Ruby Hotels.
