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2019 Irish Hotel Sector Briefing

Speakers (L-R): Aiden Murphy. Partner, Crowe, Isobel Horan, Director, Cushman & Wakefield and Guy Pasley-Tyler, Director, Archer Capital
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Dublin Hotel Market is strong & displays ‘long-term potential’ for future investors

Crowe joins forces with Cushman & Wakefield to present comprehensive briefing on the Irish hotel market

 

Monday, 7th October 2019: Crowe, Ireland’s leading accountancy practice and advisors to the Irish hotel sector, recently hosted a comprehensive briefing event on the Irish hotel market at The Conrad Hotel, in partnership with Cushman & Wakefield, a global commercial real estate services company. An audience of over 200 people gathered to hear from the keynote speaker Guy Pasley-Tyler, Director of Portfolio & Fund Management at Archer Capital, a company that manages a portfolio of high-quality European hotels valued at €2 billion.

Speaking at the joint Crowe/Cushman & Wakefield briefing about the state of the Dublin hotel market, Guy Pasley-Tyler, Director, Portfolio & Fund Management, Archer Capital, said:

“The Archer Hotel Capital team believes in the long-term potential of the Dublin Hotel market and is actively seeking investments in the city in order to further diversify its portfolio. Its high proportion of international visitation and strong links with the US economy would be complementary to other assets in the portfolio and may enable the market to out-perform its peer group over the long-term, notwithstanding any short-term challenges.”

Speaking about how the growth in the development of Apart-Hotels in Dublin, which marks the most significant structural change in the hotel market in many years, Aiden Murphy, Partner, Crowe said:

“The Dublin hotel market is continuing to evolve and one key trend we are seeing emerge is the growth of the Apart-Hotel offering in the capital and over the course of the next three years some 1,400 rooms will be added to Dublin’s capacity which equates to around 30% of new stock planned in that period. That marks the most significant structural change in the market in many years. There are certain factors which are helping to drive the Apart-Hotel market in making them both easier to run and more attractive to a growing number of visitors. Centralised reservation systems and other technology services mean there isn’t the same need for a labour-intensive effort on-site and, in many instances, one porter/receptionist looking after the guests' needs can be sufficient. This is especially the case in a well-located city-centre location where guests have a choice of bar and restaurant facilities on their doorstep and where food delivery can come through services such as Deliveroo. With mobile devices at their fingertips there's no great reliance on having a reception in place.

The pricing model from Apart Hotel, especially for longer-term stays is particularly attractive to the corporate market. Brexit has also seen executives who are normally UK-based working on Brexit-related projects in the capital and requiring longer stay options and having an aparthotel suite available for a number of weeks or a number of months meets the needs of this market segment."

Discussing current hotel transaction trends in the capital, Isobel Horan, Associate Director of Cushman & Wakefield said:

“Hotel transaction activity for the third quarter of this year, which has just closed, continues to be strong and remains on target to be ahead of last year and 2017. For the three months to end September transactions totalled €220m and particularly noteworthy in the market is an emerging trend of 5 star/luxury products transacting in the current market.

While the market continues to perform well the volume of transactions since 2014 has fallen by 80% but with the number of destressed sales that occurred at that time masks the reality of more normalised market where there are fewer transactions with a higher value reflective of a high quality and profitable stock. The Irish Market remains an attractive investment proposition to new entrants, both domestic and international. With interest from potential investors high it is a timely opportunity for owners of quality and profitable assets to benefit from an active market.”

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