The Irish hotel market recorded its strongest year on record in 2025 with the value of transactions exceeding €1.7 billion, according to estate agents Savills Ireland.
The performance was driven primarily by the €1.4 billion sale of listed Irish hotel group Dalata, to Oslo-based investment firm Eiendomsspar and Swedish hotel company Pandox, with approximately €1 billion of the sales price relating to Irish hotel assets.
“The transaction marked the largest hotel deal ever completed in Ireland and significantly altered market expectations, which had initially forecast annual volumes of €500 million to €600 million,” Savills said.
The company’s report noted that 66 hotels changed hands in 2025, more than double the number sold in 2019. The higher transaction level was linked to an easing of borrowing costs which it said supported “renewed activity following a period of limited transactions”.
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Among the other deals highlighted was the €86.5 million sale of the Ruby Molly Hotel in Dublin, which was the first Dublin hotel investment transaction since 2022.
Revenue growth outpaced inflation for many operators in 2025, Savills said even although the early months of the year were softer than expected due to a 23 per cent slump in inbound tourism in the first quarter. Savills noted that business improved as visitor numbers “normalised” from April.
“Dublin hotels achieved average occupancy of 83 per cent, with average daily rates reaching €175, representing a 23 per cent increase on pre-pandemic levels,” Savills said.
Benchmarked against eight major European cities – London, Edinburgh, Barcelona, Amsterdam, Copenhagen, Lisbon, Prague and Berlin – Dublin performed best on occupancy, with only Edinburgh and London of the other also exceeding 80 per cent last year.
In terms of room rates, Dublin ranked mid-table well below London (€222) and Edinburgh (€197) but well ahead of Prague (€120) and Berlin €122).
The report notes that a third of all new hotel bedrooms in the capital since 2019 have been in the budget end of the market, with a further 18 per cent being accounted for by aparthotels and “very few new five-star bedrooms added”.
The change in the mix of hotels had “constrained” growth in overall RevPAR (revenue per available room) – a key metric in the industry – to 24 per cent over the six year period, Savills said. The equivalent growth in the luxury segment of the Dublin market was 37 per cent with average daily room rates climbing from €225 in 2019 to €308 in 2025.
Outside Dublin, hotel performance was strong on the back of limited new supply and strong domestic demand, with average daily rates increasing by 60 per cent in Limerick, 51 per cent in Galway and 38 per cent in Cork between 2019 and 2025.
Conor Clarke, of Savills Hotels and Leisure, said 2025 “marked a defining year for the Irish hotel investment market”.
“The scale of the Dalata transaction, combined with a return of institutional capital and consistently strong operating performance, has fundamentally reinforced investor confidence in the sector,” he said.
“While development costs and operational pressures remain, the outlook for both Dublin and regional markets is positive, underpinned by demand, limited supply in key locations and Ireland’s continued appeal as a tourism destination,” he said.
