Portfolio and Provincial Hotel Transactions Dominate the Market for 2023

December 6, 2023

By John Hughes


Irish Hotel transaction volumes are expected to be in the region of €600m for year-end 2023. This was primarily driven by the recent Dean Hotel Group/Press Up portfolio sale at a reported €350m. The balance of activity comprised five Dublin hotel sales, with a combined value of approximately €120m, and 11 hotel transactions outside of Dublin for a further €140m.

The Irish hotel market has also enjoyed strong trading conditions during 2023 with occupancy levels, as of year-to-date October, trending in Dublin at 84%, Cork at 79.8%, and Belfast at 79.2%. RevPAR (Revenue per available room) also achieved record levels with Dublin reaching €152, Cork at €124, and Belfast at £84 over the same period (Source: STR). The sector also had to contend with the many challenges, experienced by all businesses, in particular higher interest rates, increased VAT rate from 9% to 13.5%, prolonged expensive utility costs and a shortage of skilled labour.

In the first ten months of 2023, over 27m passengers passed through Dublin Airport, which is broadly on par with 2019 levels, but up significantly on the same time period in 2022 (+25%). The new €320m North Runway has been operational since August 2022 and is playing a critical role in growing numbers and further establishing Dublin Airport as an international hub for leading airlines. The DAA plan additional CAPEX of €200m with the aim to get to 40 million passengers by 2031.

The most significant hotel transactions for 2023 include:

  • Portfolio – sale of 8 Dean Hotel Group assets including The Dean Hotels, The Mayson, The Clarence, The Devlin and Glasson Lakehouse
  • Dublin – The Dawson Hotel and Brooks Hotel
  • Provincial – Park Hotel Kenmare, The Imperial Hotel Cork, Crowne Plaza Dundalk, The D Hotel Drogheda, Springfield Hotel Leixlip, Trim Castle Hotel, Co. Meath and Tulfarris Hotel, Co. Wicklow.
  • Hotel Developments – The sale of 100-bedroom hotel site at Usher’s Quay and Red Carnation’s disposal of Hatch Hall in Dublin 2.

Private investors, high net worths/family offices and hotel groups have dominated transactional activity in the Irish market this year with institutional and private equity groups less active. This has the potential to change somewhat in the new year should these investors get more comfortable with asset pricing and cost of debt.

Buyers this year included Irish hotel group Cliste Hospitality who acquired two hotels in Leixlip and Belfast, Irish businessman and entrepreneur Bryan Meehan who purchased the Park Hotel Kenmare while Louis Fitzgerald Group secured The Imperial Hotel Cork.

In the last number of years, the hotel sector has attracted an additional buyer type for the provision of emergency accommodation. Hatch Hall Dublin was offered for sale earlier this year with planning for hotel conversion and purchased for emergency use, having previously been in use for student accommodation.

New hotel development continued, particularly in Dublin with 713 bedrooms opening by October. These included Motel One Abbey Street (310 rooms), Easy Hotel Benburb St. (160 rooms), Premier Inn Gloucester St (113 rooms), and The Rezz Dame Lane (51 rooms).

In terms of future openings, there are currently approximately 2,758 hotel bedrooms on site in Dublin and of these 1,800 hotel rooms are scheduled to open between now and the end of 2024. These will include the anticipated Hoxton Hotel located in the former Central Hotel on Dublin’s Exchequer Street and the Ruby Molly on Arran St in Dublin 7.

Another emerging trend this year was the interest from hoteliers and developers in repurposing legacy office buildings in Dublin, and a good example of this was the acquisition of Telephone House on Marlborough St. by JMK Group for the proposed development of a 296-bedroom hotel. This will add to their impressive portfolio of international branded hotels in Ireland.

In terms of further hotel development in Dublin there has been some concern raised among industry stakeholders regarding the impact of a new planning policy which was adopted by Dublin City Council under their new Development Plan 2022 to 2028. Its introduction is to avoid an overconcentration of hotel development in certain areas of the city centre but it is still unclear on how it will impact on future hotel development in the city.

Looking ahead to 2024, it is anticipated that the strong hotel operational performance will continue. This positivity will help to support future asset pricing and ensure that Dublin continues to be considered by investors as a liquid market relative to other European locations. We also expect regional Irish hotels and resorts to continue to be sought after among investors.

Like this year, we anticipate buyer profiles for hotels to be private capital and existing hotel groups continuing their portfolio expansion strategy and encouraged that finance costs have stabilised and trend downwards in 2024.