Europe -  Dublin, Ireland

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Dublin has become an IT hub in Europe with more than 100 overseas software companies setting up home in the city, in addition to the presence of other electronics, technology, online retail and social media businesses such as LinkedIn, Amazon, Google, Facebook and Twitter. Pharmaceuticals is also a sector of significant importance to the city, with the headquarters of Alkermes, Merrion Pharmaceuticals and the Tech Group (West Pharma) driving hotel room night demand.

With a favourable tax regime, the resultant volume of foreign direct investment is causing office rents to rise, which is being addressed by the substantial supply of new office developments across the city. Dublin is becoming more important for companies serving the EU currently located in the UK, and this increased demand is likely to continue in the near future.

Similarly to other European cities, Dublin’s hotel market performance dropped significantly in 2009, recording 25% decrease in RevPAR. Although occupancy levels recovered from 2010, likely due to the far cheaper average rates which were then offered, properties in Dublin continued to incur a year-on-year loss in RevPAR. Nevertheless, Dublin has long recovered from these difficult times and the hotel market now enjoys occupancy averages of almost 85%. The compound annual growth rate for average rate and RevPAR from 2010 to 2018 was 5% and 8%, respectively.

The outlook for Dublin’s hotel market looks promising given the numerous projects in the pipeline and investor interest. There are currently more than 5,500 hotel rooms due to open by 2021.

Transaction volumes in Dublin remain significant, but have dropped in 2018. A total turnover of almost €80 million deriving from the transaction of eight properties was reported for year-to-September 2018 in the Dublin market; a 10% drop compared to the same period in 2017. During 2018, the Hilton Dublin Airport was sold to Westmont Group for a reported €22.5 million, whilst Propiteer purchased the ibis Hotel for €14 million.

Overall, hotel values in Dublin increased by 5.6% in 2018, as recorded in our 2019 European Hotel Valuation Index.

The widespread impact of the coronavirus (COVID-19) has had an unprecedented impact on hotels and hotel values worldwide. Consequently, the latest HVI analysis may no longer reflect the most current measure of lodging industry strength or the hospitality investment market.

In each of our offices across the globe, we are working tirelessly to analyze the impact of recent events and provide timely insights to help you navigate these uncharted waters. Because it is unclear how long the pandemic will last or how long related restrictions will be in place, we are updating our analyses on a weekly basis using the most current data.

Additionally, examination of value trends in prior cycles can provide useful information. Historical patterns, together with an understanding of the market’s current expectations for the eventual recovery of the industry and its performance, can provide insights on the likely trajectory of decline and recovery for hotel values.

For the Latest Information and Analysis on the Impact of COVID-19Click Here

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For more information, please contact:

Sophie Perret, MRICS, MBA
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Magali Castells
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