Dublin hotel price surge 'risks hurting city's tourism'
A continuing surge in the cost of Dublin hotel rooms risks reducing the capital's attraction as a value-for-money European destination, a new report has warned.
The report, which has been produced by accountancy and advisory firm Crowe Horwath Ireland, shows that average room rates in Dublin jumped by €16.44 (£15.27), or 14.7%, to €128.27 (£119.14) a night during 2016. But the same report insists that current average rates being charged by hotels need to be sustained to maintain profit levels in order to support the business case for new hotels.
Aiden Murphy, the partner at Crowe Horwath who prepared the report, also said the recovery of Ireland's hotel sector has been achieved "across the board", with regional hotels also posting strong increases in average room rates during 2016.
He said that in Dublin, the cost of building each hotel room averages out at €300,000 (£279,000).
"The annual profit per room is €20,000 (£18,500) so that's a 15-year payback. Our view is that profits need to be at this level, otherwise you find that projects which people are looking at at the moment will be delayed," he said.
Ryanair chief commercial officer Kenny Jacobs cautioned yesterday that Ireland needs to become increasingly competitive in order to attract more tourists from mainland Europe as a slide in the value of sterling slashes the number of visitors from Britain to Ireland.
Meanwhile, Ireland's largest hotel operator, Dalata, has secured competition clearance to acquire the freehold and certain parts of the Clayton Hotel on Cardiff Lane in Dublin, and also the Clarion Hotel, located at Liffey Valley.
Elsewhere, the four-star Gibson Hotel in Dublin's docklands has been put up for sale for a guide price in excess of €87m (£81m).
Built by developer Harry Crosbie during the boom, the 252-bedroom property has been brought to the market by international real estate advisers, Savills, on the instruction of joint receivers Paul McCann and Stephen Tennant of Grant Thornton.