Dublin to be 1,100 hotel rooms short of demand by 2020

New report by Fáilte Ireland says the State will miss out on tens of millions of euro

A shortfall of at least 1,100 hotel rooms is expected in Dublin by 2020, depriving the exchequer of tens of millions of euro, according to a new report by Fáilte Ireland.

The report, An Analysis of Tourism Accommodation in Dublin, points out a "strong pipeline" of new hotel accommodation, following "almost a decade of inactivity", is expected to improve tourism capacity pressures in Dublin by 2020.

However, this activity is still being outpaced by growing demand and an expected shortfall of at least 1,100 rooms is still predicted for the city by then.

The 2018 total of Fáilte Ireland registered accommodation capacity in Dublin is approximately 51,000 bedspaces.


When compared to the register as at 2015, the data shows growth in hotel bedspaces of 2,861 although a slightly declining number of hotel establishments, as well as net growth of approximately 300 bedspaces in other categories.

The report notes increases in self-catering and caravan and camping capacity along with declines in capacity in the other categories.

Operating conditions in the Dublin hotel market remained “very strong” in 2017, albeit with decelerated annual growth in average daily rates (ADR) and revenues per available room (RevPAR), over the previous two years.

Unprecedented levels

According to figures from hotel analysts STR, hotel occupancy grew by 0.8 per cent to a level of 83 per cent in 2017, while ADR and RevPAR grew by 7 per cent and almost 8 per cent respectively over the year, both to “historically unprecedented levels”.

Such high levels of occupancy place the Republic at the top of the occupancy scale compared to competitor cities, and effectively mean full capacity and unmet demand in a range of specific contexts.

“Despite such high occupancy however, Dublin remains a medium-priced city destination by European standards with lower ADR than cities such as Amsterdam, Barcelona, Copenhagen, London, Paris and Rome,” the report says.

“The STR compression analysis supports much anecdotal evidence concerning the sheer non-availability of accommodation at peak periods in Dublin for numbers of tourists that might seek it, beyond those for whom it may be available but too expensive or unaffordable.”

Under construction

The report estimates that, from 2018-2020, a total of 5,436 hotel rooms will come on stream, including more than 3,000 already under construction, representing private sector investment in Dublin of €815 million.

Among those developments, two out of three of the additional rooms will be in new hotels; approximately 40 per cent will be in the Dublin 2 and 4 area; and one in seven in the Dublin 1 prime area, which covers the North Docks and the route of the Luas extension on O’Connell Street and Parnell Square

The rest of Dublin 1 and Dublin 8 account for more than 1,500 of the projected new rooms. Another 460 rooms expected at or close to the airport, an area that experienced the highest levels of occupancy across the entire Dublin region in 2017.

Fáilte Ireland estimates that under the current economic circumstances every additional 200-bed hotel generates tourism revenue of €9 million, creates 180 jobs and contributes €2 million per annum to the exchequer.

Tourism revenue

The additional hotel bedrooms expected by 2020 should generate approximately 5,000 jobs, €250 million in tourism revenue and 55 million annually for the Exchequer.

Although growth was still strong year-on-year, nationally there was a deceleration in the rate of overseas tourist growth to Ireland in 2017 following annual growth that averaged about 7 per cent per annum over the years 2012-2016.

The nine million trips in 2017 represented 3.2 per cent annual growth on the previous year.

While the data shows the number of domestic trips to Dublin fell slightly, annual growth in overseas tourists in 2016 was 15.2 per cent, resulting in a total increase of 9 per cent over the previous year.

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter