A NEW SURVEY has shown that hotels in Dublin are the driving force behind recovery in the industry with sales slowly creeping back up to 2007 levels.
The Annual Hotel Survey by Crowe Horwath found that hotel sales in 2012 were at 76 per cent of levels seen before the economic downturn. Occupancy rates are also continuing to rise at 63.8 per cent nationally and the average room rate is up €2.05 to €74.72 nationally.
Unsurprisingly the most expensive rooms are in Dublin with the average rate last year rising over six per cent to €86.04. Hotels on the Western Seaboard had the lowest annual room rate of just under €62.
Occupancy rates are still considerably higher in Dublin than elsewhere in the country – 38 per cent higher than those in the Midlands and East.
While economy hotels saw no change in average room rates between 2011 and 2012, first class and luxury or five star hotels both saw increases of 5.6 per cent and 8.7 per cent respectively.
Again, Dublin came out on top as far as profit margins on rooms making over €10,000 per room before tax last year compared to €7,690 the year before.
This compares to the average profit per room of €6,497 with all other regions falling below this level last year.
Commenting on the report, the Irish Hotels Federation noted that the profits cited by Crowe Horwath do not take into account interest payments made on outstanding debt in the sector which currently stands at €7 billion. The average cost of finance per hotel room in Ireland in 2012 was €6,500 per annum. When this is applied to the average figure cited by Crowe Horwath, the federation said it shows that “the hotels sector as a whole is just breaking even with profits generated going to service interest on outstanding debt”.
Partner at Crowe Horwath, Aidan Murphy said that while the growth overall was encouraging, it is clear that “a two speed recovery is in train with Dublin outpacing the rest of the country across all major industry metrics”.
He said substantial investment in hotels is needed to ensure that they remain attractive to both domestic and international guests.