Irish hotel rooms filling up but there’s still room at the inn

Irish hotels have experienced a small resurgence in occupancy and the room prices they can charge, but they are still operating with far less custom than at the height of the boom.

The Crowe Howarth Annual Irish Hotel Survey for 2012 found that occupancy in that year rose to 63.8%, 2.4% higher than in 2011. Over the same period, the average room rate increased by €2.05 to €74.72 and food sales rose by 8.3%.

However, Crowe Howarth pointed out that hotel sales levels are still at 76% of their 2007 peak. Furthermore, it found that the recovery in business was occurring much more rapidly in Dublin than anywhere else in the country.

For example, occupancy in Dublin in 2012 stood at 73.9%. In the south-west, which it classed as Cork, Kerry, and Limerick, occupancy was just 62.1%. Likewise, when it came to room prices, the average in Dublin in 2012 was €86.04, whereas in the south-west it was €73.54, €61.87 in the west, and €74.28 in the midlands and east.

Crowe Howarth also looked at how much profit hotels could expect to make across the country.

It found that, in Dublin, the average profit per room was €10,038. That was significantly more than the south-west (€5,260), the midlands and east (€5,144), and the west (€5,471).

The report’s authors said 37.4% of reservations in 2012 were made via the internet. The report also found that more than 85% of hotels have used an online discount site and an average of 3% of their total annual room sales were generated that way.

The survey’s authors said that, in recent years, there had been concern over the issue of oversupply of hotel rooms and the potential need to close hotels.

“By and large, this has not occurred to any significant extent and is unlikely to occur,” they said. “At the end of 2012, there were 57,859 hotel rooms registered with Fáilte Ireland, which represents a reduction of 2,358 rooms, or 4%, in capacity over a two-year period.”

Aiden Murphy of Crowe Howarth said it was encouraging to see sustained growth in the sector following significant decline since the onset of the downturn.

“However, it is clear from the analysis that a two-speed recovery is in train, with Dublin outpacing the rest of the country across all major industry metrics [occupancy, room rates and profitability],” said Mr Murphy.

“With overall sales levels at 76% of activity in 2007, the market remains some distance off peak levels.

“While profitability has increased in the sector, substantial investment in hotels will be necessary to ensure that the product remains attractive both for domestic and international guests.”


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