Dublin is second best performing hotel market in Europe
City is second only to Madrid for revenue per room growth but it is also one of the most volatile markets survey finds
Dublin enjoyed one of the strongest revpar increases in Europe in 2015, coming in second place behind Madrid, but ahead of Birmingham, Athens and Manchester, on the back of “strong interest from investors, a rise in visitor numbers, and the fact the city has a limited pipeline for new properties”.
The Dublin hotel market was the second best performing European market by valuation in 2015, according to a new survey. However it is also one of the most volatile, the survey shows.
The hotel valuation index for 2016, by global hotel consultancy HVS, shows that the revenue per available room (revpar) of Dublin hotels soared by 13.4 per cent in 2015, following another year of strong growth in 2014, when values rose by 13.2 per cent. This is in strong contrast to 2009 when values plummeted by 20.2 per cent, which means that the compound annual growth rate (CAGR) for the years 2006-2015 is still in the red, at -0.9 per cent.
Dublin enjoyed one of the strongest revpar increases in Europe in 2015, coming in second place behind Madrid, but ahead of Birmingham, Athens and Manchester, on the back of “strong interest from investors, a rise in visitor numbers, and the fact the city has a limited pipeline for new properties”. The European average was 3.6 per cent. Geneva was one of the “losers” with a growth in value of just 1 per cent, while Paris saw almost no change in value, after a challenging year, with November’s terrorist attacks hindering year-end results.
“With one of the strongest revpar increases in Europe in 2015 as evidence of strong investor appetite for this city, Dublin again maintains its privileged position,” the report said, adding that with a limited pipeline of new hotels, this will keep the momentum going.
However, it also warned that the city is expecting an additional 5,000 rooms to enter the market in the next five years.
This may be why Dublin was also the fifth most volatile city in the years 2006-2015, behind St Petersburg, Athens, Prague and Sofia. The volatility index assesses the fluctuation in value and the overall risk associated with a hotel investment. Higher volatility implies higher risk, but it may also indicate higher returns, the report says.
Dublin, with a volatility rating of 89 per cent, is 89 per cent more volatile than the value of a typical hotel in Europe. Least volatile were the hotel markets in Berlin, Hamburg, Copenhagen, Paris and Brussels.
Meanwhile at the Irish Hotels Federation’s conference in Killarney, newly elected IHF president Joe Dolan called for a new five-year product development plan for Irish tourism, as he warned that economic upturns in Ireland’s major overseas markets have, to a large extent, masked a number of worrying challenges facing the industry which must be tackled head-on in order to secure longterm sustainable growth.
“Our industry has benefited enormously from positive economic tailwinds from North America and Britain in recent years, contributing to impressive growth in overseas visitor numbers. While this has provided tourism businesses with a much-needed boost, we cannot afford to take recent successes for granted - particularly at a time of increased uncertainty in the global economy. It’s vital that we focus on achieving sustainable growth while safeguarding our market share against potential risks.”