Dalata sale pushed investment activity in Irish hotel sector to €1.6bn 

Fáilte Ireland report said value of deals up significantly in 2025

The Gibson Hotel, part of the Dalata Hotel Group. The Dalata group was sold for €1.17bn in 2025 to the Scandinavian consortium of Pandox and Eidendomsspar.

Investment activity in the Irish hotel sector broke new records last year with just over €1.6bn spent on acquisitions, according to Fáilte Ireland.

A new report by the national tourism development authority said the value of investments in hotels in 2025 was significantly ahead of the €1bn which was recorded the previous year.

However, the vast majority of the record total was accounted for by a single landmark deal – the €1.17bn sale of the Dalata Hotel Group and its 12,219 guestrooms to the Scandinavian consortium of Pandox and Eidendomsspar.

Excluding the Dalata acquisition, the value of investment in the hotel sector last year was €457m, of which €312m was on hotels in Dublin and €145m on hotels outside the capital.

The highest single asset transaction was the reported €86m sale of the 272-bedroom Ruby Molly Hotel on Arran Street East, Dublin 7 which was purchased by Deka Immobilien.

Outside Dublin, the highest value sale was the purchase of the Kilkenny Ormonde Hotel and its associated multi-storey car park by TMR Hotel Collection for €32m.

The next highest was the €24m sale of the Pillo Hotel in Ashbourne, Co Meath to the McDermott Group followed by the €21m purchase of Clayton Whites Hotel in Wexford by Neville Hotels.

On a price per key basis, which measures the total investment cost per guestroom, the most expensive transaction in the sector in 2025 was the €40m sale of the Fleet Hotel in Dublin’s Temple Bar at €385,000 per key.

The second highest price per key transaction at €362,000 per key was the €83m purchase of the Radisson Blu Airport Hotel in Dublin by Dalata Outside the capital, the highest price per key was €271,000 for the sale of Kilkenny Ormonde Hotel.

Fáilte Ireland said there was a total of 12,750 tourist accommodation bed places under construction nationwide at the end of the third quarter of 2025 – up from 11,500 at the end of the first quarter of the year.

Of those, 11,600 are due to be completed before the end of the current year.

Over 70% of bed places under construction are located in Dublin, predominantly in hotels.

The report said a large proportion of the 3,750 bed places under construction outside Dublin relate to an additional 1,400 bed places being developed at Center Parcs Longford Forest resort.

It noted there was no construction activity on new tourist accommodation in three counties at the end of September 2025 – Cork, Offaly, and Roscommon – while there were nine other counties with fewer than 40 new bed places being built.

Fáilte Ireland said cost pressures remain visible in the hospitality industry with a total of 129 insolvencies recorded in the sector last year, although the figures represent a decrease of 12% on 2024.

A breakdown of insolvencies showed 70% were in restaurants and cafés.

Although the reduced VAT rate of 9% announced in last October’s Budget is due to apply to the food and catering sector from July 2026, Fáilte Ireland said cost pressures will remain, due to an increased minimum wage rate and the pension auto enrolment scheme which came into effect in January.

Looking at the year ahead, the report said investment sentiment in the hotel sector remains strong.

Although the total value of transactions is expected to fall due to the absence of exceptional big-ticket sales, it maintained activity was likely to remain “robust”. However, the report noted that the attractiveness of hotels as an investment globally has cooled in the past year, based on Deloitte’s Global Commercial Real Estate Outlook 2026 where they had slipped three places to 8th position in terms of the most popular asset class.

The report also noted that Dublin slipped four places to 15th among the most attractive European cities for hotel investment in a list headed by London, Madrid, Athens, Paris, and Amsterdam.

It claimed opportunities and risk for the hotel sector remain largely consistent with 2025 with the main concerns relating to the economic impact of heightened geopolitical tensions, weakness of the US dollar and weaker consumer sentiment due to cost pressures on households.