One-third of hotels in Ireland have changed hands since 2011, with a combined sales value of around €2.4bn (£2bn) over the past five years, according to Savills Ireland.
Some 47% of Dublin city centre hotels have been involved in deals, while 80% of the hotels in Cork, 56% of the hotels in Limerick and 33% of the hotels in Galway also changed ownership.
Last year, more than €850m of hotels traded, the second-largest year of the period examined.
Major sales include the former Doubletree by Hilton Burlington Road for €182m, the Gresham hotel for €91m, the Temple Bar Hotel for €55m and the Fitzpatrick Lifestyle Portfolio, consisting of the Morgan, Spencer and Beacon hotels for a combined price of €150m.
Outside Dublin the largest regional transactions included the Radisson Farnham Estate, which sold for €27m and Lyrath Estate, which sold for €23m. With such an intense level of activity over the past five years, Savills expects the volume of sales to normalise in the coming years.
Tom Barrett, head of hotels and Leisure at Savills Ireland, said that Ireland is unique in terms of the sheer volume of hotel sales. The advisory firm forecasts a renewed focus on the development and refinancing of hotels to meet demand in the sector.
New supply is expected to remain low in 2017. Only 180 bedrooms, which comprise extensions to existing properties, are predicted for the year. The most significant is the addition of 73 bedrooms to the North Star Hotel on Amiens Street in Dublin 1.
But In 2018, Savills expects 1,500 new bedrooms to be operational.
Dalata, Ireland’s largest hotel operator, will open two new hotels, a 178-bedroom Clayton on Charlemont St in Dublin 2 and a 150-bedroom Maldron on Kevin Street Upper in Dublin 8.
A 202-bedroom Aloft Hotel is under construction as part of a mixed-use scheme in Dublin’s Liberties, an area of major urban regeneration. Paddy McKillen Jr’s Oakmount will also open a 41-bedroom hotel in Ranelagh.
In 2019, more than 2,000 bedrooms could be delivered in Dublin, including the new 40-bedroom hotel at Dublin Airport linked to Terminal 2 and extensions to a number of existing airport hotels.
Aparthotels are also an emerging trend in various stages of the development cycle. Ten potential new developments, ranging in size from 50 to 250 bedrooms are in the works. Many of these schemes secured planning permission in 2016 which Savills says indicates an expansion of this previously limited sector.
Barrett said: “Hotel development, like many areas of the property sector, stopped during the downturn, so there is a big element of catch-up in Dublin. This, coupled with air traffic surpassing all previous records in 2016 – with further growth expected this year – means there is a real need for new bedroom stock in the right areas.”
