Crowe Horwath’s Mairea Doyle-Balfe spoke this morning at Bank of Ireland’s Hotel Sector Briefing event, held in the Clayton hotel Ballsbridge. Mairea spoke alongside Sarah Duignan, STR; Tom Barret, Savills; Tim Fenn, Irish Hotel Federation and Gerardo Larios, Bank of Ireland.
Mairea, a director in our hotel tourism and leisure department spoke about the current opportunities that face the Irish hotel market and specifically the opportunities to grow EBITDA by adding additional bedrooms through extensions both in Dublin and regionally.
Mairea began with an overview of the current hotel supply, and domestic and international visitor demand. She reviewed the geographic mix of demand by region within Ireland, highlighting that the domestic visitor is the most important demand market for Irish hotels across all counties.
She addressed hotel performance and the trends over the past ten years, highlighting that in 2016, which the Midlands and East region generated the most revenue per available room (€78k), hotels within this region also reported the lowest profit before tax at 15.1% due to the large levels of food and beverage business that they accommodate.
Mairea illustrated the feasibility of two potential extensions across two contrasting hotel properties:
- A premium central Dublin hotel. Analysis showed that with a 60 bed extension the hotel could grow EBITDA by €2.4m
- A regional hotel with a strong food and beverage offering. Analysis showed that a 40-bedroom extension could grow EBITDA by €488k
The potential yield for the Dublin property was higher, reflecting a stronger market. Regional development yields are lower, however being cognisant of build costs and the customer being accommodated, regional extensions are viable in certain locations.
Mairea concluded that the recovery of the Dublin hotel sector supports investment in both new hotel developments or extensions. In addition, continuing improvements in regional hotels profit levels will allow for re-investment and extensions in key markets.
Please contact Mairea Doyle-Balfe or a member of our specialist hotel, tourism and leisure team if you would like a copy of the presentation or if we can assist with any hospitality or tourism-related project.