Cushman & Wakefield - Our latest Ireland Hospitality Marketbeat shows that from an economic perspective, the outlook for the hotel sector remains positive - the latest Irish labor market data show an all-time high employment of 2.66 million across the economy while average weekly earnings grew by 4.6% compared to the same period in 2022, both of which supports the leisure spending outlook.
In terms of Ireland tourism trends, we estimate that on a twelve-month rolling basis inbound arrivals surpassed pre-COVID levels in the final quarter of 2023. Furthermore, Oxford Economics' latest forecasts for international visits into Ireland continue to point to sustained growth with increases of 5% and 7% respectively expected for 2024 and 2025 respectively.
Overview
2023 was very much the year where Irish hotels left the COVID pandemic era behind. The domestic economy was a strong support for trading conditions in the sector although the sharp increases in interest rates and general market repricing kept investment volumes at a lower ebb in a historical context.
Transaction Activity
In 2023 the total hotel transaction volumes amounted to approximately EUR307 million*. Some notable transactions include the sale of Telephone House which sold for EUR28 million to John Kajani and the EUR50m sale of Brooks Hotel to the MHL Collection. There were several sales in the EUR10 - EUR20 million range including the Crowne Plaza Dundalk, Tulfarris Hotel & Golf Resort, and Park Hotel Kenmare. Looking forward, we expect transaction levels in 2024 to show good growth compared to 2023.
Source: Cushman & Wakefield- Source: Cushman & WakefieldSource: Cushman & Wakefield- Source: Cushman & Wakefield
Source: Cushman & Wakefield- Source: Cushman & Wakefield
Development Activity
In 2023 approximately 1,400 rooms were delivered in Dublin. Premier Inn continued its expansion in Ireland by opening 3 new hotels in Dublin and reaching completion on their first hotel in Cork. Some other brands that opened in Dublin for the first time were easyHotel, Motel One, and Clink Hostels. Approximately 1,400 rooms are due for completion in 2024 and these include The Leinster, a 55-bedroom hotel by Press Up, Ruby Molly Dublin, a 273-bedroom hotel in Dublin 7, and CitizenM's 247-bed hotel on Bride Street, Dublin 8. According to STR, there are currently 18 projects under construction outside of Dublin due to be completed in 2024. Some notable openings include the new 50-bed hotel at Goffs in Kildare and Premier Inn's 187-bed hotel opening in Cork.
Outlook
From an economic perspective, the outlook for the hotel sector remains positive - the latest Irish labor market data show all-time high employment of 2.71 million across the economy while average weekly earnings grew by 4.6% compared to the same period in 2022, both of which support the leisure spending outlook. In terms of tourism trends, we estimate that on a twelve-month rolling basis inbound arrivals surpassed pre-COVID levels in the final quarter of 2023. Furthermore, Oxford Economics' latest forecasts for international visits into Ireland continue to point to sustained growth with increases of 5% and 7% respectively expected for 2024 and 2025 respectively.
Occupancy and RevPAR data for the hotel sector edged higher in the second half of 2023, reflecting the positive macro and tourism picture. Furthermore, the latest occupancy data also suggest that we haven't seen any significant fallout as a result of the restoration of the 13.5% VAT rate last September. The sector still faces cost challenges however energy cost pressures began to ease somewhat in the second half of 2023 and we expect this to continue in 2024 which should provide the sector with some cost respite.
Source: Cushman & Wakefield- Source: Cushman & WakefieldSource: Cushman & Wakefield- Source: Cushman & Wakefield
Source: Cushman & Wakefield- Source: Cushman & Wakefield
*A contingency of 5% is assumed for transactions in the last 12 months, as some deals are revealed with delays.
About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries. In 2023, the firm reported revenue of $9.5 billion across its core services of property, facilities and project management, leasing, capital markets, and valuation and other services. It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity, Equity and Inclusion (DEI), sustainability and more.
For additional information, visit www.cushmanwakefield.com
Tom McCabe
Head of Research and Insights Ireland, EMEA Head of Living Research
Cushman & Wakefield
CUSHMAN & WAKEFIELD PLC 
