Irish hotels see good start to the year as revenues rise

Savills reports rise of 9.5% in revenue per available room in January with more to come

Beacon Hotel, sold as part of the Fitzpatrick Lifestyle portfolio, with  the Morgan and Spencer, for a combined price of €150 million. More than €850 million of hotels traded last year. Photograph: Matt Kavanagh

Beacon Hotel, sold as part of the Fitzpatrick Lifestyle portfolio, with the Morgan and Spencer, for a combined price of €150 million. More than €850 million of hotels traded last year. Photograph: Matt Kavanagh

 

One third of Irish hotels have changed hands since 2011, with the combined sales value totalling €2.4 billion, according to a study from Savills Ireland.

The news comes as Irish hotels reported a positive start to 2017 with revenue per available room – “revpar” – rising 9.5 per cent in January.

According to the Savills report, more than €850 million of hotels traded last year, with sales including the former Doubletree by Hilton Burlington Road for €182 million, The Gresham hotel for €91 million, the Temple Bar Hotel for €55 million and the Fitzpatrick Lifestyle portfolio, consisting of the Morgan, Spencer and Beacon, for a combined price of €150 million.

Savills said new supply will remain small in 2017 with about 180 bedrooms coming on stream. Next year, an estimated 1,500 net new bedrooms are expected with a further 2,000 the following year.

Occupancy rates

Separately, new data from analytics firm STR show Irish hotel occupancy increase 3.7 per cent last month with average daily rates surging 5.7 per cent as revpar jumped by nearly 10 per cent.

This was the strongest reading in Ireland since last September and marks an improvement of 3.1 percentage points on the fourth-quarter average of 6.4 per cent.

Dublin hotels reported a revpar increase of 9.2 per cent year-on-year to €72.68, while the regional revpar rose 7.5 per cent to €45.88.

In a note to investors, Goodbody said that, while January is not a critical month for the sector, the data was good news for the Irish hotel market and for the listed group Dalata.

Goodbody forecasts an 8 per cent rise in Dublin revpar growth and a 3 per cent increase in regional growth for 2017. Davy forecasts 10.3 per cent and 8 per cent growth respectively.