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Recovering Irish Hotel Market Attracting Range of Investors

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2020 was forecast to be another year of steady growth for Irish tourism, the country’s largest indigenous industry and biggest regional employer.

In 2019, a record 10.8 million overseas or out-of-state visitors came to Ireland, while domestic trips surpassed 11.6 million, with combined revenues from both foreign and domestic tourists reaching more than €9.5 billion according to Fáilte Ireland figures.

In the opening months of 2020, overseas visitor numbers were indeed marginally higher than 2019 levels and hotels were performing well. When COVID-19 began to spread across the world, the hospitality sector was one of the first and worst hit. While domestic tourism in the form of ‘staycations’ made up some of the losses, this was concentrated in regional locations.

The global success of the vaccine programme meant that overseas tourism could recommence last summer. By April 2022, the number of overseas visitors to Ireland had recovered to 86% of 2019 levels and hotel occupancy levels, according to STR, had recovered to around 80% of 2019 levels with Dublin beginning to outperform other locations again. This is despite well-documented challenges including staffing shortages and surges in inflation (in relation to energy, food and insurance in particular) which are putting pressure on hotel margins.

Activity in the hotel market has been supported by pent-up demand along with the fact that record levels of household savings are now beginning to be unwound. In addition, hotels and other wedding venues are seeing high levels of bookings for 2022 and 2023, driven by postponed or delayed weddings, meetings and social gatherings.

After a hiatus caused by the pandemic, hotel investment activity began to recover during 2021 with the successful sale of several prominent hotels including the Hilton Garden Inn in the IFSC (sold to Henderson Park as part of a larger Hilton portfolio) and the Morrison Hotel, Dublin 2 (c. €65 million to Zetland Capital). Overall, 18 hotels transacted during the year with the total volume of sales reaching approximately €400 million. This compares with 10 transactions in 2020 totalling €165 million. We have seen continued momentum in 2022 several hotels changing hands including the Hendrick Hotel, Smithfield (c. €35 million to TPG), Killashee House Hotel in Kildare (c. €25 million to FBD Hotels) and Ballymascanlon House Hotel in Co. Louth (c. €15 million to Thomas Röggla / TMR Hotel Collection). 

Since the beginning of 2014, Colliers has sold or acquired in excess of 300 hotels and hospitality businesses throughout the UK and Ireland. Marcus Magnier, a Director in Colliers’ Residential Country Homes & Leisure team commented, “in the Irish market, many buyers are particularly focused and excited by hotel opportunities that offer value-add potential. An example of this is Dunboy Castle which was sold by Colliers earlier this year. This 84-bed hotel on a spectacular and historic oceanfront site in West Cork is set to be completed and relaunched by new owners Oakmount as a five-star resort.”

In terms of buyer profile, active investors in the Irish hotel market include national hotel groups such as MHL Hotel Collection, Dalata, Tifco, Tetrarch; international hotel groups (Intercontinental Group, Red Carnation Hotels) and high-net-worth individuals such as Austrian investor Thomas Röggla whose TMR Hotel Collection now includes 14 hotels across Ireland. There has also been strong activity among Irish investment groups such as MM Capital and BCP Capital seeking value-add opportunities, along with overseas investors like Deka Immobilien, Union Investment, Archer Hotel Capital and TPG Group who have all acquired Irish hotels since 2019. Ireland is seen as somewhat of a ‘safe haven’ for overseas investors, many of whom are now seeking to diversify their portfolios and secure more attractive financial returns via alternative investments such as hotels.

Colliers are now marketing another value-add opportunity in the recently refurbished and modernised four-star Beara Coast Hotel in Castletownbere, Co. Cork. “This is an excellent opportunity to acquire a trading asset at a time when construction cost inflation is rising sharply and the search for value gets more and more difficult,” Patrick Ryan, Colliers Head of Hotels & Leisure commented. “Invariably, the re-instatement costs of building a hotel from scratch today will be many times more expensive than acquiring one from an owner who is retiring or who is moving on to pastures new – and that’s not even counting the cost of hotel sites which in some parts of the land can be eye wateringly expensive”, he said.

Despite glimmers of positive change, Ireland’s hotel sector is not without its challenges and the outlook remains relatively uncertain. Even with the recent removal of almost all public health restrictions in Ireland, international tourism is still below normal levels, while inflation and persistent staffing issues will impact on hotel performance. Significantly reduced corporate demand is likely to continue as remote working practices and virtual meeting tools lead to reduced business activity for hotels in Dublin in particular. Increased focus on ESG will also impact overseas business travel although many hotels are responding to this through the addition of solar panels, heat pumps, EV charging stations and other energy-saving measures. Hotels are also increasingly being leased by the State for housing services to support the more than 10,000 people experiencing homelessness in Ireland, as well as those in direct provision and Ukrainian refugees. This is putting pressure on the already limited supply of hotel rooms across the country.

There are reasons for optimism though. Investors remain committed to the Irish hotel market, supported by recently announced performance results from large hotel groups such as Dalata, Hilton and Marriott which indicate that a clear recovery is underway. Consumer spending has held up, underpinned by savings built up over the last two years, and it is hoped that the current inflationary spike will be only temporary. With occupancy levels continuing to improve, we are now seeing an increased number of assets being brought to market, which should drive further investment activity in 2022 and beyond.


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Recovering Irish Hotel Market Attracting Range of Investors

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Kate Ryan

Director | Head of Research


Kate is Head of Research for Colliers in Ireland. Kate's role involves tracking and analysing property market data and trends and producing market reports and commentaries across all sectors. Kate is also part of Colliers EMEA research team and provides Irish market data which feeds into EMEA reports, allowing for analysis and comparison of occupier and investment trends.

Kate is an Associate Member of the SCSI and holds an MSc in Real Estate from TU Dublin. 

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Marcus Magnier

Director | Residential Country Homes & Leisure


Head of Residential, Development and Country Homes Departments, with over 40 years' experience advising on, valuing and selling Residential and Country properties as well as major Hotel & Resorts.

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Patrick Ryan

Head of Hotels & Leisure


I have spent almost my whole career in the Hospitality Industry. Initially with Inter-Continental Hotels Corporation I worked in  their New York office beofre transferring to their Europe Middle East Headquarters  in Paris and later London as the Executive Assistant to the President. After 7 years with IHG I joined specialist Surveors Christie  + Co  in London   in 1989 and trained to become a Hotels Negotiator. I subsequently became a Board Director and 10  years later was appointed Managing Director of their Brokerage and Insurance Division Christie Finance and Christie Insurance. Returning to Ireland in 2009 I joined the fledgling Agency NAMA which was being established after the financial crash and spent a further 10 years there where I was  a Senior Manager and their Hotel Sector Specialist. I joined Colliers in December 2020.

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