Ireland has seen significant growth in international tourism in recent years, coupled with improved spending from a buoyant domestic market. But with Brexit looming and a raft of new openings coming to market, what does the future hold for hoteliers? And how can they best prepare to navigate through the coming uncertainty?
Sarah Duignan, Director – Client Relationships, STR, gave some great insight into the Irish market, with a special focus on Dublin, and the recent Dublin Revenue Lab, organised by Avvio and Duetto.
In her opening keynote, Duignan painted a positive picture of strong demand with a caveat that uncertainties around Brexit still might have an impact on the market.
Across Ireland, average daily rate (ADR) growth is slowing across all markets, but the country is still fielding some impressive results:
| ADR | RevPAR | Occupancy | |
| Dublin | €145.43 | €122.69 | 84.4% |
| Cork | €116.22 | €93.56 | 80.5% |
| Galway | €111.74 | €86.47 | 77.4% |
| Kilkenny | €116.36 | €89.00 | 76.5% |
| Kerry | €124.16 | €86.91 | 70.0% |
*Figures YTD September 2019
Drill Down into Dublin
Looking specifically at the Dublin market, Duignan explained how RevPAR is now under pressure as new supply enters the market. YTD figures up to September 2019 showed that supply had grown 4.6%, while demand had only increased 3.9%. This had led to a -2% decrease in occupancy.
“Supply is growing at a faster pace than demand coming into the marketplace,” Duignan explained. Year to date, the city has had a strong summer, but business will go softer as we go into the end of the year.”
This supply growth is pushing RevPAR down, as STR metrics showed a 0.3% decline in revenue.
In the past 12 months, new openings in the Irish capital have included The Devlin, Marlin Hotel, Aloft, Hyatt Centric, Clayton Hotels and Staycity aparthotels. In addition, several properties have added extensions, increasing their room counts. As a result, Dublin is pacing behind STLY as the impact of new supply takes hold.
However, Dublin has a strong base, despite this new supply, with opportunities to drive more revenue.
Currently, Wednesday nights are pulling in similar occupancy to Saturdays with less than 0.5% occupancy differential, but at a €23 lower rate. Sundays and Mondays are also seeing growth.
Dublin currently has 259 hotels with a total of 24,544 rooms, and a pipeline of 33 hotels, representing 3,619 rooms, that’s a 12.7% growth in hotels and a 14.7% uplift in rooms. New Dublin openings due to still open in 2019 and 2020 include the Wren Hotel, Premier Inn, Holiday Inn, Hard Rock and Hampton by Hilton.
On The Books
Looking at the Forward Star, Dublin is bucking the trend, with 63% of on-the-books business for the next 28 days. Looking further forward, that trend is set to continue. The NFL coming to Dublin next June is already translating into strong OTB, with hotels selling well in advance.
However, Duignan did have a caveat or two to place for the future. There is a slowdown in US travellers coming in, and the devaluation of the pound is impacting the UK source market.
In summary she concluded: travel demand is up, performance is challenging for many, supply is up, but Brexit will impact demand. The question remains how much and how long?