Irish hotels ‘must stay competitive’

Irish hotels enjoyed the sixth year of turnover growth with occupancy levels back to pre-recession levels — but have been warned they must remain competitive or risk losing out to other European cities.

Irish hotels ‘must stay competitive’

The annual Crowe Horwath hotel industry survey, which is compiled from Irish hotels’ 2016 accounts, found that the national room occupancy level for 2016 was 74%, up from 71.1% on the previous year.

The average room rate charged across all hotels at €104.11, up from €92.15 in 2015, the survey found.

Hotels in the Midlands and East region showed the highest year-on-year growth in occupancy levels, up from 65% in 2015 to 68.5% in 2016.

Crowe Horwath said Dublin continues to outperform other regions with average room rates increasing by 14.7%, almost twice the level of Western hotels which saw a growth in average nightly room rates of 7.5%.

Room rates in the capital have now surpassed 2006 peak prices of €120.38 by €7.89, it found.

Hotels surveyed attributed their growth to a continued increase in international visitors, particularly high-spending US visitors, as well as increases in corporate business, particularly in the conference market.

The retention of the 9% Vat rate and upgrading and refurbishment of revenue-generating areas within their hotels were also factors, the survey found.

However with occupancy at an all-time high, there is an urgent need for more rooms, particularly in Dublin — while the entire country must remain competitive, the firm said.

The drop in UK visitors because of sterling falls would not be offset by an increase in US visitors if hotels were not competitive, partner Aiden Murphy said.

“Unless more rooms become available, rates will increase to a higher level than we would like. It is not just about losing UK visitors who may not come because of sterling, but also that we are competing with the UK for the US market.

“That competitive tension means we not only have to retain and grow UK visitors, but also retain and grow our US share,” he said.

Mr Murphy warned hotels against spiking prices when a special event was taking place, saying it would harm the reputation of the industry.

“We would encourage hoteliers to have a policy of keeping prices within a certain range.

“We’ve seen prices increase to very high levels with the likes of the Ed Sheeran concerts. The industry does itself no favours when that happens,” he said.

Crowe Horwath estimates over 5,000 new rooms will be needed in Dublin, with 2,000 in the regions.

Plan approved

The Dalata Hotel Group has received clearance from the Competition and Consumer Protection Commission (CCPC) to acquire the freehold interest of certain elements of the Clayton Hotel on Dublin’s Cardiff Lane, as well as the Clarion Hotel in the Liffey Valley area of the capital.

This acquisition is expected to close over the coming weeks.

In May, Dalata — which owns the Clayton and Maldron hotel brands — said it was acquiring elements of the two hotels from receiver Kieran Wallace for a combined €62.5m.

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