'Optimistic' 2024 for hotels as Taylor Swift and Coldplay concerts drive demand

Hotels expect to benefit as fans flock to see Taylor Swift in June. AP Photo/Natacha Pisarenko

There is an “optimistic outlook” for the hotel industry going into 2024 with forward bookings showing strong months ahead with several much-anticipated events to come throughout the year, property advisor Savills Ireland said.

According to the company, following years of instability where the industry showed resilience, it bounced back over this year despite ongoing challenges such as the aftermath of the pandemic, the fallout from the war in Ukraine, and inflationary pressures.

Tom Barrett, head of hotels and leisure at Savills Ireland, said hotel occupancy rates “returned to their 2019 levels with even strong pricing”.

He said this demonstrates the “industry's adaptability and resilience”.

"While we faced cost pressures across various sectors, including payroll and energy, the growth in top-line revenue has largely offset these challenges, making 2023 a positively memorable year for many hotel operators,” Mr Barrett said.

Dublin demand

Going into 2024, the hotel industry has already seen massive demand centred around a number of events taking place in Dublin.

The rush to get tickets for Taylor Swift’s concerts in the Aviva Stadium in June also drove hotel bookings with Coldplay’s concerts in Croke Park in August also driving demand for accommodation.

On top of this, the UEFA Europa Cup Final will take place in Aviva Stadium in May.

However, Savills Ireland thinks hotels surpassing the record average room rate of €326 — achieved in August this year when Notre Dame took on the US Navy in an American football match — remains a challenge.

While the hotel industry — particularly in Dublin — is gearing up for a potentially busy summer, the investment market for hotels has seen some shifts.

There has been a slowdown in investment transactions in the Dublin hotel sector with Mr Barrett saying the “gap between buyer and vendor expectations has widened”.

He said this has been influenced by frequent interest rate hikes making borrowing more expensive.

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While transaction levels have been lower, there has been “significant activity” in regional Ireland, according to Savills.

The firm noted that there have been several key transactions in the €10m to €30m price range including the Imperial Hotel Cork which was sold to veteran Dublin hotel and bar owner Louis Fitzgerald.

Going into next year, Savills anticipates significant transactions in the hotel market.

The sale of a majority stake in Press Up Hotels — which owns the Dean Hotels, as well as the Devlin and the Clarence Hotel — to UK group LHC is expected to be completed next year. In addition, there is the potential sale of Tifco’s portfolio of 24 hotels across the country.

Savills said these developments, along with the ongoing interest in converting office spaces to hotels, “underline the sector's attractiveness as a high-potential investment avenue”.