Domestic and overseas investors flocked to snap up hotel assets as a number of factors created strong demand which was sustained throughout the year, according to research from property agents Savills Ireland.
The weakness of the euro compared to the dollar and sterling coupled with GDP growth of 7% and an increase in overseas visitors of 14% led to the unprecedented level of sales.
Whether the record spend will be beaten this year remains to be seen but the signs are that strong demand will continue over the coming 12 months, according to Savills Ireland director of hotels and leisure, Tom Barrett.
“Ireland’s tourism industry is now achieving record volumes and combined with a strong domestic economic recovery this is driving high hotel occupancy rates throughout the country.
"This positive position attracted the attention of both domestic and international hotel operators and investors in 2015.
“We predict that 2016 will show further recovery with current positive indicators being maintained.
"Moreover, the addition of events such as the 1916 Centenary and the box office success of Star Wars will also attract visitors to both the capital and rural Ireland,” Mr Barrett said.
A number of significant deals were struck during 2015 including Dalata’s acquisition of Moran Bewley’s Hotels and the Clarion in Cork which sold for a record €35.1m.
Limerick businessman JP McManus snapped up Adare Manor while Us private equity firm Lone Star purchased Jurys Inn.
The strong demand seen in the Irish market is not entirely out of kilter with the rest of Europe where investors are encountering similar circumstances.
A report by consultancy firm HVS London indicates that owners are approaching what they consider to be the peak of the property cycle.
This peak could, however, last for some time.
“Some [owners] have already shown their desire to sell the hotels they have only recently acquired – well before the usual five to seven-year time normally sought.
"The trend towards early checkout will continue as long as there is a queue of investors still seeking to acquire hotels and portfolios,” said HVS chairman Russell Kent.