Dublin, Wednesday 12th August 2015. Crowe Horwath, leading advisors to the Irish hotel sector, launched its 20th Annual Irish Hotel Survey today which shows a continued improvement in the fortunes of the Irish hotel sector. The report, which is compiled from Irish hotels’ 2014 accounts, reveals that key performance metrics have improved for the third year running with Dublin again outperforming other regions. The headline national average room occupancy level for 2014 was 67.8%, up from 65.9% on the previous year with average room rate charged across all hotels in Ireland at €82.29, up from €77.49 in 2013.

Dublin hotels continue to lead the recovery in the sector with the capital’s hotels showing occupancy levels at 77.2% up from 76.3% in the previous year. The average rate charged for a room in Dublin is now €97.25, up from €90.73 on the previous year, representing a 7.2% increase year-on-year. While room rates in the capital are some way off 2006 peak prices of €120.38, the average nightly cost per room is still significantly ahead of other regions (€79.36 in Midlands & East; €79.43 in South West; and €67.50 in Western Seaboard).

Respondents to the survey identified the key drivers of growth in 2014 as:

·         An increase of 8.9% in overseas visitor numbers

·         Weakening euro against sterling and US dollar

·         GDP growth of 4.8% in 2014 indicating increased domestic activity

·         Improving business and consumer sentiment

The Crowe Horwath Annual Hotel Industry Survey 2015 provides the most comprehensive analysis available of the financial performance of Irish hotels and is the only published report which provides details of profitability in the sector. The report breaks down the performance of Irish hotels both by region (Dublin, Midlands and East, South West and the Western Seaboard) and by classification (luxury, first class, mid-price and economy). The analysis features room occupancy average; average daily room rate; revenue per room and profit before tax per available room.

The key findings of the 2015 survey are:

  • Continued growth in average occupancy, up 1.9 percentage points to 67.8% (from a low of 59.4% in 2009)
  • Average room increased by €4.80 to €82.29 with room sales now at 84.3% of pre-recession levels
  • Food sales increasing 11.7% in 2014 with Dublin seeing twice the increase (up 21.3%) than Western Seaboard hotels (up 9%).
  • January has lowest average room rates at €68.46 while the cost per night rises to €96.11 on average in August. The lowest average room rate is in the Western Seaboard region at €54.35 in January with the highest average in Dublin during September at €110.42.
  • Dublin hotels are more dependent on room sales with 53.3% of revenue derived from that income stream whereas rooms account for just 28.7% of turnover in Midlands and East hotels (37.2% in South West and 35.2% in Western Seaboard)
  • Dublin hoteliers are twice as profitable as their counterparts in Western Seaboard with profit before tax per available room at €13,797 in the Capital versus €6,791 in Western Seaboard.
  • There were 24 fewer hotels in 2014 than the total number of 835 in the previous year which led to a reduction of 626 available bedrooms.
  • Despite significant attempts by hoteliers to deliver a more competitive product through managing operating costs which are 6.7% lower than 2006 levels, utility costs have increased by 28.5% in an eight year period. A key driver of the increased charge is Public Service Offering standing charge which increased by 85% in 2014.
  • The North American market performed particularly well again with a further 171,000 visitors (14.7% increase) building on a similar increase in the previous year travelling from North America. This market is traditionally associated with higher spending guests who typically stay longer.
  • Internet bookings are now the biggest source of reservations accounting for 43.2% versus 41.7% for direct enquiries. Internet bookings, which include online travel agencies such as and Expedia and deal sites like Grab One and Done Deal have increased by almost 50% since 2006.
  • Occupancy levels in Dublin (which hit 85% between May and October 2014) indicate need for additional capacity to be delivered in short-term, without which, possible resultant room rate increases could erode competitiveness in this key market.

Commenting on this year’s survey, recovery and restructuring partner at Crowe Horwath, Aiden Murphy said“The fortunes of the Irish hotel sector improved again in 2014 with increases recorded in all key performance metrics such as occupancy, average room rate and profitability. While average room rates increase by 6.2% on average last year and profit per room by 25.2% Irish hotels remain a good value proposition for both overseas visitors and domestic consumers. Notwithstanding recent modest room rate increases, the average rates per room remain almost 16% lower than pre-recession levels. While profit levels are increasing significantly, the returns will need to be directed to much-need renovation of existing stock given that many of Ireland’s hotels were unable to allocate funds during the downturn.”

Addressing the key issue of supply in the Dublin market, Mr. Murphy added: “The accelerated pace of recovery in average room rate being achieved by Dublin hotels is being driven by the limited capacity as occupancy levels for hotels in Dublin reaches 77.2%, with occupancy levels for the period May to October over 85%.  It is expected that the Dublin hotel market will continue with its upward average room rate trajectory in the coming years.  Any over-pricing of hotels rooms in the Dublin market, which acts as a gateway for travel into Ireland, could thwart the potential for continued expansion of the overseas tourism numbers to Ireland and have a negative impact on tourism and economic recovery if new supply is not delivered.

While the focus of the industry leaders has been on delivering higher tourist numbers there needs to be a strategy to ensure that new hotel supply is introduced to the Dublin market so there is sufficient room supply to cope with the projected increase in tourism numbers through the ongoing overseas marketing strategies that are yielding success.

To date the primary obstacle to new room supply in Dublin has been the lack of availability of long-term funding to support large capital investment for start-up enterprises.  The second challenge is the complexity and timeframes around the planning process which has delayed new hotel developments for the city.  We would urge immediate attention be given to fast tracking a pipeline of new supply to meet the growing level of demand in the Dublin market.”

Speaking at the launch of the Crowe Horwath report, Minister for Transport, Tourism and Sport, Paschal Donohoe TD said: “I welcome the publication of Crowe Horwath’s annual Ireland Hotel Industry Survey which provides a significant insight into the health of this crucial sector. The findings of this survey show that, although some regions are performing better than others, the recovery in the hotel sector is continuing across the country.  The results show continued annual increases over the past number of years in key performance indicators such as room occupancy, rates, revenue and profits.  Indeed occupancy levels in some parts of the country, in particular Dublin City Centre, mean that we will need to increase the size of our hotel stock to ensure that Ireland and its capital continue to have a competitive tourism product both for domestic consumers and overseas visitors.”

Outlook for 2015

Optimism levels in the sector remain strong with 94% of hoteliers predicting an improvement on profitability in 2015. Among the key factors driving the optimism are favorable exchange rates with two key markets, UK and North America, successful promotional efforts from both Tourism Ireland and Failte Ireland such as Ancient Ireland East and Wild Atlantic Way with domestic confidence feeding into increased bookings from the home market.


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