New hotels to be reduced and delayed by Covid-19
The delivery of new hotels in Ireland will fall by almost a third due to the impact of Covid-19, property advisor Savills has said.
The company has predicted a 32% drop in Dublin’s hotel development pipeline, and said a number of hotels planned for Cork are unlikely to be delivered.
4,000 new hotel bedrooms have been added in Dublin over the past 10 years, with over 80% of these coming on stream in the past three years.
However, from March 2020 to the end of 2022, Savills has reduced its forecast supply of new hotel bedrooms in Dublin by 32%, to just over 4,000, with over half of those expected in 2021.
Tom Barrett, Director of Hotels at Savills Ireland said they recently visited Dublin hotel construction sites to observe physical progress.
“Based on these visits — and our own analysis — we expect hoteliers, developers, and investors will complete most projects that have commenced construction, although the delivery and opening dates will slip,” he said.
“The probability of opening is greatest for hotels that are already significantly completed, with a greater risk of delay and repurposing for sites that have not commenced, or are in the very early phase of development.”
With a reduced development forecast for Dublin hotels, Savills said they believe new hotel development in Cork, Galway, Limerick, and elsewhere will be more difficult to deliver in the coming years.
Cork has seen significant numbers of hotel developments announced in recent years.
Parnell Place, Custom House Quay, South Mall, South Terrace, Sullivan’s Quay, Morrison’s Island, Horgan’s Quay, Brian Boru Street, and MacCurtain Street — all in Cork City — have hotel developments in various stages of construction, planning, or proposal stage.
Speaking to the Irish Examiner, Mr Barrett said that, even before the outbreak of Covid-19, it was unlikely that Cork would have seen the development of all these hotels and the outbreak means developers will have to consider future projects.
“There are a lot of hotels in Cork and Dublin that are largely built, that require fit-out work, but will likely be delayed as there are no builders on sites at the moment so they could face a one- or two-month delay,” he said.
“However, others have not started and owners will be considering what is the business case.
“The domestic visitors will come back faster, but international visitors will rely on the return of airlines which have been significantly impacted.”
Savills pointed out that Cork has strong hotel occupancy both midweek and at weekends.
Mr Barrett added that the addition of major office developments in Cork at Penrose Dock and Navigation House would also increase demand for hotel rooms in the city.
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