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Dublin the third most attractive UK/Ireland location for hotel operator

Tom McCabe • 21/07/2023

• Dublin third most attractive UK/Ireland location for hotels, attractiveness of Cork market also growing strongly

• 89% of urban hotel operators across the UK and Ireland optimistic about the next twelve months, rising development costs are hindering further expansion

• ESG (Environmental, Social and Governance) factors are increasingly impacting on commercial terms for hotels

 

Operator optimism evident

Cushman &Wakefield’s latest Operator Beat for the first half of 2023 showed improved optimism across the hotel sector in the first half of 2023.

Our annual hotel operator survey saw international and regional hotel operators – all which are active in the UK and Ireland markets – give their views on sector opportunities and challenges in these geographies. The respondents are responsible for more than 1,500 hotels with over 228,000 rooms already operating in the UK and in Europe, with a collective pipeline of 363 proposed hotels comprising over 59,000 rooms.

CWOperatorMarketbeatQ22023

Across the UK and Ireland 89% of hotel operators answered that they were optimistic about the outlook for urban hotels (as measured by Revenue Per Available Room) over the next twelve months. Across the various hotel classes, operator confidence in the luxury segment in particular stood out with 78% of operators answering that they were optimistic about the outlook here.



Irish locations seen as attractive

Operators viewed the Dublin market as the third most attractive location across the twenty UK and Ireland markets surveyed as part of the report. In addition, Cork’s attractiveness as a hotel location saw the strongest growth of all the twenty UK and Ireland markets, up 8% compared to the previous survey two years ago.



ESG factors becoming more important

ESG (Environmental, Social, Governance) factors are increasingly impacting commercial terms for hotels based on the 2023 survey. For example, 67% and 63% of hotel operators answered that they would pay more key money* and rent respectively for hotels with the highest ESG credentials.

Rising development costs remain a headwind to operators expanding further. On average 17% of operators’ projects are currently delayed with the majority of delays in the order of 6-12 months. The two biggest reasons cited for delays were increased development costs (86%) and issues around debt funding (50%).

Given the impact of the COVID pandemic in the past two years, perhaps it is not surprising that 48% of hotel operators reported an increased trend towards pandemic clauses in new contracts and contract renewals in the past twelve months.

Commenting on the results of the 2023 Cushman & Wakefield Operator Beat, Tom McCabe, Head of Research Ireland, said “It is heartening to see improved confidence among hotel operators following an incredibly difficult last few years. It is not surprising to see both Dublin and Cork register as very attractive locations in our survey as both markets have largely recovered the ground lost through the COVID pandemic and now stand to benefit further from Ireland’s very strong economic outlook.”

Media Contact

Lauren Joselyn Cushman & Wakefield
Lauren Joselyn

Associate Director, EMEA Communications • London

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