A boom in hotel construction in the Republic has been brought to a shuddering halt by the Covid-19 crisis, property group Cushman & Wakefield has said.
In a report on the hotel market here, the firm noted that at there were 4,850 rooms under construction across the State at the end of the first quarter of 2020, the highest level since its records began. The vast majority ( 87 per cent) were in Dublin.
“However, as the quarter ended and Covid-19 unfolded, uncertainty nested itself in the market,” it said.
“ Hospitality was one of the first industries to be impacted and is arguably one of the most heavily hit asset classes so far,” it said.
Prior to the crisis, some 3,300 hotel rooms were expected to complete construction by the end of 2020.
Given the restrictions in place, this number is expected to be much lower, with completions that were due in the second and third quarters of the year pushed into the final months of 2020 and the opening months of 2021.
In its report, Cushman & Wakefield noted that development activity has been a key feature of the hotel market here over the past two years.
The most notable completion in the first quarter was the Hard Rock Hotel Dublin, a 120-room hotel which opened in February 2020, adding to the list of hotel brands which have become “very visible in the capital” over recent years, it said. Other hotel brands – Tune, NYX and Motel One – also have projects under construction here.
Sales
The report also noted that transaction activity was solid in the opening quarter, with a total of €61.8 million transacted across four hotel sales. The largest of these was the five-star K Club Hotel and Resort in Straffan, Co Kildare.
The luxury venue was bought by Irish businessman Michael Fetherson, for approximately €57 million, from businessman Michael Smurfit.
In addition, the Anchor House, Dublin 1 sold for approximately €3.4 million, while the West region saw the Mayfly Hotel sold at auction for €267,000.
"2019 saw the first year of meaningful hotel development in almost a decade. While the opening quarter saw construction activity remain resilient, the overall delivery of hotel bedrooms is forecast to decline in 2020, hampered by impact of Covid-19 and construction capacity in the wider economy," Cushman & Wakefield's Isobel Horan said.
