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CBRE revealed that the sector picked up in Q2 following a slow Q1, despite deal flow remaining below the long-term average, in its most recent Irish hotel market research.
Nonetheless, hotel trading remains strong, as occupancy levels in Dublin averaged 78% for the year ended in May, which saw a record-breaking ADR of €209m (£178.4m) achieved in Dublin.
According to the real estate company, a total of €91m (£77.7m) worth of Irish hotel transactions were completed in the second quarter, across six separate deals.
This means that a total of €135m (£115m) of capital was deployed on Irish hotels in the first half of 2023.
However, in the investment market, hotel transactional activity in Europe held up better than other commercial real estate sectors in Q1, albeit still subdued relative to the long-term average.
So far during this year, CBRE found that private investors, family offices and hotel groups have dominated transactional activity, with institutional investors and private equity groups being less active.
This could be because the Dublin market still remains undersupplied in hotel bedrooms, particularly when compared with cities of a similar size.
Yields for prime Dublin leased hotels are now at 4.5% and trending ‘weaker’ than expected.
According to CBRE, concerns have been raised among industry stakeholders regarding the negative impact on future supply of a recent policy implemented as part of the DCDP for between 2022 and 2028.
