Ireland’s Hotel Sector Review


Ireland’s Hotel Sector

Since the financial crisis, the Irish hospitality sector has experienced a challenging trading environment as a result of reduced demand due to the economic downturn and the legacy of excessive debt. The sector was also negatively impacted by an oversupply of hotels in the market due to attractive tax breaks offered on hotel developments. A large number of hotels were transferred to financial institutions or placed in receivership and require essential investment in order to preserve and, more importantly, develop business. However, the above institutions are often disinclined to advance funds to meet these requirements. This negatively impacts trading, which reduces values and leads to assets being realised at heavily discounted prices.

The key value driver is that hotels are now valued on an enterprise basis rather than an asset basis and have become available to investors for purchase as a result of ongoing deleveraging. Significant signs of continuing economic recovery are being witnessed in the Irish hospitality & leisure market.

Tourism

Increasing international visitor numbers encouraged by tourism initiatives, increased air travel routes, attractive rates of currency exchange. Soar; Situation & Outlook Analysis Report

Domestic Market

An increase in employment and household disposable incomes.

Demographics

An increase in the percentage of the population aged over 55 +.

Hotel Performance

Double digit increases in revenue per available room (RevPAR), the key measure of hotel performance. Read the latest report

Macro

Retention of the 9% VAT rate, introduced in July 2011, & the abolition of the travel tax.

Public Facilities

Enhanced tourism infrastructure.

We believe that an attractive opportunity continues to exist in the Irish hotel sector. Such opportunities do not present themselves. They have to be sought out by a local expert with an unrivalled knowledge of the hospitality market.

 

We are the right partner to execute this role. We offer domestic and international investors the opportunity to partner with an excellent local hotel team and the potential to achieve attractive returns by investing in suitable opportunities through a highly focused acquisition strategy.