Easy pickings to be had in Dublin's hotel market

The imminent arrival of the ‘super budget’ brand, EasyHotel, into Dublin is timely, writes John Daly.

Easy pickings to be had in Dublin's hotel market

With the growth in the capital’s business-and-tourism market, the lack of accommodation has hampered the sector’s potential growth.

The hotel chain, which was founded in 2004 by Stelios Haji-Ioannou, nine years after his launch of EasyJet, has acquired a freehold site in central Dublin to develop a 130-bedroom property.

Located on the corner of Benburb Street and Wood Lane, the site has planning permission for a 96-bedroom hotel, and was acquired for €9m.

Development costs are an additional €9m, and this will be the group’s third new property, since its successful fundraising in March, 2018.

In support of an ambitious growth plan, EasyHotel is expanding its development pipeline of hotels in key tourist and city centre destinations across Europe and the UK.

Recent research by hospitality analytics firm, STR Global, showed Dublin has amongst the highest occupancy rates in Europe, with a lack of accommodation pushing up prices.

“Dublin’s already high occupancy levels have left little room for year-over-year growth,” the report stated.

“However, the market’s popularity as a destination, and consistent demand for rooms, continue to result in record-breaking performance,” it said.

In the first quarter of this year, the average daily room rate of Ireland’s hotels increased 6.2% on the same period last year, to €113.67, far outstripping a European growth of 2.6% and an average daily rate of €100.61.

Similarly, in the revenue-per-available-room metric, Ireland increased 9.7%, almost double the European average of 4.8%.

A report, last year, by Fáilte Ireland, expected an additional 5,000 hotel rooms to come on-stream in Dublin by 2020, which should ease the supply bottleneck, as growth in tourist numbers continues to outpace hotel supply.

Demand for accommodation has grown by over 50% since 2010, but supply has remained unchanged.

“Prices are going up, and value-for-money is a key concern in light of Brexit,” said Caeman Wall, head of research with Fáilte Ireland.

EasyHotel’s Dublin site takes the company’s pipeline of owned/leased projects to 1,280 rooms, in addition to 1,782 franchise rooms currently under development.

Easy pickings to be had in Dublin's hotel market

“Europe holds a number of attractive opportunities for the EasyHotel brand and we are keen to achieve a balance in our development pipeline between the UK and Continental Europe, as we look to accelerate our presence in these markets,” said the company’s chief executive, Guy Parsons.

With a strong UK development pipeline already confirmed, EasyHotels is expected to open four new hotels, comprising 517 rooms, by the end of the current calendar year. EasyHotel Maastricht opened at the beginning of July, taking the total number of hotels in the group to 28.

Ireland had 4.9m overseas visitors from January to June of this year, with just over one million visitors from North America, up 10.7%, and 1.78m from mainland Europe, up 10.2%. British visitor numbers also increased by 2.3%, to 1.79m.

“This growth in international visitor numbers and revenue is not only great news for employment, but also for government finances, with 23 cent in every euro of tourism spend finding its way to the exchequer,” Fáilte Ireland’s chief executive, Paul Kelly said.

“The tax take from tourists is now the equivalent of over €1,000 for every household in Ireland. There is still huge opportunity to further grow the contribution tourism can make to our economy, through public and private sector investment and by expanding both the regional and seasonal spread of tourism,” he said.

With 80% of tourist bed nights in just five counties, there is significant opportunity for further growth, particularly if a hard Brexit becomes a reality.

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