At Ireland's Developing Tourism 2020 conference, held Monday at Dublin's Croke Park stadium, Paul Kelly, CEO of the National Tourism Development Authority Fáilte Ireland, told an estimated 600 attendees the Irish capital “desperately needs” more hotels to sustain the country’s tourism industry.
According to local paper The Journal, Kelly said the city would be "about a thousand rooms short of what’s required" over the next three to four years. The country as a whole, he added, is losing out on "tens of millions" of euros in revenue due to the lack of hotels that could host attendees for large-scale conferences and events.
Falling Visitor Growth
Visitor numbers have been "largely flat" for the year, the Authority said, blaming the U.K.'s looming Brexit for the uncertainty affecting travel-related businesses in the area. Six months ago, data and analytics company GlobalData reported on slowing inbound tourism growth for Ireland as a whole. Last year, compound annual growth rates for inbound arrivals were nearly half the rate for the previous years, from 8.1 percent in 2014 to 2018 to 3.8 percent for 2018 to 2023, it noted.
The slowdown in visitor numbers is apparently already hurting Irish hotels. In Fáilte Ireland's Tourism Barometer 2019, the Authority reported 44 percent of hotels were facing profit declines, while only 29 percent reported profit growth. "Profitability is being challenged from a number of different angles," the report noted, citing the restoration of the value-added tax rate, rising operating costs and "low-priced competition."
And as numbers tracker HotStats noted last month, August was the eighth consecutive month of profit decline for Dublin hotels.
At the end of September, property consultants CBRE Ireland reported during the first nine months of the year, 16 hotels changed hands for more than €304 million. In addition, "several large hotel transactions" were underway at the time of the report, and were expected to be completed before the end of 2019. This, the company predicted, "will boost annual spend," although it remains to be seen if 2019 will reach the 21 individual sales that netted €757 million in 2018, much less the estimated €850 million reached in 2016.
Demand, CBRE's analysts claimed, continues to outstrip supply, particularly for hotels in Dublin city center. Notable recent deals include the sale of Druids Glen Hotel & Golf Resort in County Wicklow and the Central Hotel in Dublin, as well as Germany's Deka Immobilien acquiring Dublin's Marker Hotel for an estimated €130 million.
"The volume of pent-up demand for prime hotel opportunities and depth of capital looking to deploy is encouraging some vendors to consider bringing their assets to the market," CBRE analysts noted in October. "At this juncture, we have visibility on a good pipeline of product due to be launched for sale during the first half of 2020, including some Dublin properties."