Dublin Hotels Experiencing Exceptional Levels of Advance Bookings this Summer

IHF Update on Hotel Capacity Challenges in Dublin

• Dublin experiencing a much faster rebound in tourism than previously anticipated
• 80% of available Dublin hotel rooms for June already booked in advance by the end of May
• Unprecedented reduction in Dublin hotel capacity with 17.6% of room stock not currently available for use as tourist accommodation

Tuesday, 14^th June 2022: Hotels across Dublin are experiencing exceptional levels of advance bookings this summer relative to capacity as a result of a much faster rebound in tourism than previously anticipated, according to the latest analysis by the Irish hotels Federation (IHF). This coincides with an unprecedented reduction in Dublin hotel room stock that would normally be available to supply tourism accommodation.

As a result, many hotels are nearing full capacity on busy days earlier than in previous years. Some 80% of available Dublin hotel rooms for the month of June had already been booked in advance by the end of May. This is a significant increase on pre-pandemic levels in 2019, when the advance bookings for June stood at 65% at the end of May.

Tim Fenn, IHF Chief Executive said: “The recovery is being fuelled by very significant levels of pent-up consumer demand – both domestically and internationally. At the same time, many Dublin hotels are managing unprecedented levels of displaced business including group bookings that had been previously contracted back in 2020 and 2021. Dublin hotels are also experiencing substantial increases in demand from activity within the wider economy, for example with large-scale commercial construction projects having restarted.”

Dublin has 22,492 registered hotel rooms. IHF industry research indicates that 17.6% of these (3,960 rooms) are currently unavailable for use as tourist accommodation: 15.2% (3,410 rooms) are contracted by Government and State bodies while 2.4% (550 rooms) are out of service due to reduced staffing levels, staff accommodation allocations, supplier issues and refurbishment projects.

Mr Fenn notes that hotel capacity issues are further compounded by shortfalls in additional Dublin hotel stock coming on stream due to delays in construction activity during the pandemic. The combined effect of these exceptional factors is that there are now more nights, particularly at weekends and on nights when there are major events, where hotel room occupancy in Dublin exceeds 90% (compression nights) and the last available rooms are quoted at rates in excess of the average daily room rate.

“What is often lost in the commentary is that the vast majority of rooms currently sold have been contracted and previously booked well in advance at rates significantly below the last available rates. Actual average price increases have been much lower with overall value for money in themarket in Dublin remaining competitive with our European peers relative to the very high quality of our hotel and guesthouse product.”

According to independent consultants STR, the average room rate for Dublin hotels in April this year was €154 and early indications are that the average rate for May was approximately €177, a 15% increase on May 2019 (pre-pandemic). This is in the context of hotels experiencing spiralling operational costs with year-on-year increases of 88% in energy, 18% in food and beverage supplies, over 30% in linen services and 20% in insurance costs.

Commenting on the outlook for the sector, Mr Fenn stated: “The current imbalance is resulting in what we expect to be a short-term disruption to the market, which is likely to be resolved as pent-up demand eases and further hotel room stock comes on stream.”

He states that, while demand and supply challenges are causing significant difficulties, the hotels sector and wider tourism industry also face a number of additional pressing challenges. These include heightened uncertainty around inflation as markets adjust to demand/supply imbalances; escalating costs of doing business; lingering economic risks in relation to the impact of the virus on international tourism; an increased risk of a global downturn and further supply chain disruptions. Coupled with this, there is no early end in sight to the war in Ukraine and the disruption caused to global commodity markets.

“It is clear that enormous challenges remain as we seek to recover from the worst economic shock in living memory and focus on the long-term sustainable growth of our industry, including the restoration of over 270,000 tourism livelihoods throughout the country. This is the overriding priority for us and our industry partners over the coming months,” he concludes.

-ENDS-

FOR INFORMATION:

Kathryn Moley                   086 733 4438; kmoley@kano.ie

Notes to Editor:

About the IHF

Founded in 1937, the Irish Hotels Federation is the national organisation of the hotel and guesthouse sector in Ireland. It represents almost 1,000 hotels and guesthouses nationwide, employing over 60,000 people and is a key stakeholder in the Irish tourism industry.

Tourism sector at a glance (Pre-Covid figures for 2019 unless otherwise stated)

• 10.9 million out of state visitors
• Tourism accounts for almost 4% of GNP
• Total tourism revenue of €9.2 billion in 2019
• Tourism industry created over 90,000 new jobs since 2011. Before the COVID-19 crisis it supported over 260,000 jobs, equivalent to 11% of total employment in Ireland with over 60,000 of these jobs in the hotel sector alone.