Dublin hotel rates set to rise by 30% in three years
City’s hotels had 82.5% occupancy rate in 2016, PwC reports
PwC sees Dublin moving up the ranks in terms of daily rates from ninth position to sixth between 2016 and 2018. Photograph: Cyril Byrne
The average daily rate for a Dublin hotel stay jumped 15 per cent in 2016 and is set to rise by the same again over the next two years, as occupancy levels continue to top the European tables even as 1,000 new bedrooms are developed in the capital, according to a new report.
PricewaterhouseCoopers said in its latest annual European cities hotels report, published on Monday, that Dublin hotels had an 82.5 per cent occupancy rate last year, followed by London, at 81.3per cent, and Amsterdam, at 78 per cent.
PwC estimates that Dublin, which took joint top position with London in 2015, will lead the list of 17 cities over the next two years.
Irish hotels emerged as a hot spot in the commercial property deals market last year, against the backdrop of rising room rates and lack of new supply, with €850 million of transactions recorded, real-estate agents Savills said recently in a report.
Dublin led the way as the former Burlington Hotel was bought by German investment fund Deka for €180 million, while the Gresham Hotel was sold for €91 million to Spanish group Riu Hotels and Resorts, and the Morgan, Beacon and Spencer hotels were sold to a consortium that includes US billionaire John Malone. PwC sees the volume of hotel sales increasing this year.
PwC sees Dublin moving up the ranks in terms of daily rates from ninth position to sixth between 2016 and 2018 as the average cost of a room per night jumps by 8 per cent this year and 6.5 per cent next year, to reach €147.
Geneva and Zurich topped the chart in 2016, with average daily rates at almost €300 and €250 respectively.
“The number of hotels in Dublin has remained relatively static over the last 10 years, with only five openings since 2007,” the PwC report said, noting that there are currently 147 registered hotels in the city, equating to 18,500 rooms.
“With visitor numbers continuing to grow year on year there are ongoing concerns regarding the lack of new supply. It is estimated that Dublin will have up to 300 new bedrooms in 2017 and 700 in 2018.”
Fáilte Ireland estimates a total of 80 hotel projects are in the pipeline, of which 65 are likely to open by 2020.
When extensions to existing hotels are included, about 5,500 new rooms could be added.
“A myriad of factors, including the continued growth to our economy, improved air access – Dublin Airport had a record-breaking 28 million passengers in 2016 – and increased number of visitors to the city helped demand for hotels in Dublin continue apace,” said Jennifer Gillen, senior manager at PwC Ireland’s hotel and leisure practice.
Ms Gillen added that while Brexit may create uncertainties for the market, hotel rates growth should be underpinned by limited new supply emerging this year.
While the PwC report does not reference the impact of competition in the sector Airbnb, a publication in January said more than 400,000 visitors to Dublin stayed in properties offered through this online marketplace for short-term stays.
The report, Home-Sharing: the Positive Impacts on Dublin, said some 6,100 Airbnb hosts welcomed 403,500 visitors to the capital last year.