Sales of Irish hotel properties are expected to exceed €700 million in 2016.
Transactions for the year are expected to once again exceed €700 million this year with 55 properties around the country changing hands, according to CBRE Hotels. This year will also be the best year ever for visitor numbers, with more than 10.5 million. 2017 is expected to see further growth of 4.5%
2016 has proved another busy year for the sale of Irish hotels following a record-breaking 2015 where a massive 63 properties were sold, transactions worth €710 million.
A key ingredient to the success, according to CRBE Hotels, is Dublin’s RevPAR (revenue per available room) continuing to attract international buyers. The RevPAr has continued to build momentum since 2014 and has now increased to 23%.
2016 has seen a number of high profile transactions with some of the country’s most famous hotels changing hands during the year.
Blackstone sold DoubleTree by Hilton Hotel to a German investment fund for €180 million, double Blackstone’s original investment in the former Burlington Hotel property. Operations in the property are currently managed by Dalata under the Clayton Hotel brand.
Dublin’s iconic Gresham hotel also changed hands this year, being sold to the Spanish Riu Hotel Group for €92 million after a fierce bidding war. The 4 star 323 bedroom property now called the Riu Plaza Gresham Dublin has planning permission for 140 additional bedrooms and conference facilities.
Hotel occupancy in Dublin has hit record heights this year, at 82 per cent, and will probably continue into 2017 due to the well documented shortage of hotel beds. According to STR Global, the hotel bench markers, during the last twelve months, the average Saturday night occupancy in Dublin was 89.6%.
According to a report by Fitzpatrick Associates, conducted on behalf of Failte Ireland, the large shortfall in accommodation has been negated by Airbnb, which provides around 782 rooms every day. This is the equivalent to four 200-bedroom hotels.
There have been only four new hotels opened in the past eight years- the Gibson, the Temple Bar Inn, the Dean and the Marker. In 2016, one hotel closed (the 182-room Clyde Court) and one opened (the 198-bed Holiday Inn Express on O’Connell Street). Only 16 extra rooms have been added in a city estimated to desperately need an additional 5,000.
here are plans for up to 80 individual hotel projects. Some are new builds and others are extensions to existing properties. The largest hotel will be at Dublin Airport’s T2, with more than 400 rooms.
Other large projects are a hotel at the Convention Centre Dublin (300 bedrooms), the Coombe (260 bedrooms) and a selection of 200-room new builds in Spencer Dock, Bow Lane, Charlemont Street, O’Connell Street, and Mill Street. Most of these won’t be operational until 2018 or 2019
Outside Dublin, a small number of big sales also boosted tourism growth.
Lyrath Estate outside Kilkenny city sold for far more than its €20 million guide price. The 1,250-acre Farnham Estate in Cavan, was sold for more than €22 million. Other country properties that have changed hands this year are the Clarion in Sligo for €13 million to Dalata; the Pillo in Ashbourne to Podium Hotels for €11 million; and Tulfarris Estate at Blessington to PremGroup for €8 million, a good deal higher than the asking price of €5 million.