Key performance metrics for hotels have improved for the third year running with Dublin again outperforming other regions, according to Crowe Horwath’s 20th annual Irish Hotel Survey.

The report, which is compiled from Irish hotels’ 2014 accounts, reveals that national average room occupancy level for 2014 was 67.8%, up from 65.9% on the previous year, with average room rate charged across all hotels in Ireland at €82.29, up from €77.49 in 2013.

Dublin hotels continue to lead the recovery in the sector with the capital’s hotels showing occupancy levels at 77.2%, up from 76.3% in the previous year. The average rate charged for a room in Dublin is now €97.25, up from €90.73.

While room rates in the capital are some way off 2006 peak prices of €120.38, the average nightly cost per room is still significantly ahead of other regions - €79.36 in Midlands & East; €79.43 in South West; and €67.50 in Western Seaboard.

Respondents to the survey identified the key drivers of growth in 2014 as:

In Association with

• An increase of 8.9% in overseas visitor numbers.
• Weakening euro against sterling and US dollar.
• GDP growth of 4.8% in 2014 indicating increased domestic activity.
• Improving business and consumer sentiment.

The Crowe Horwath survey is the only published report which provides details of profitability in the sector. The analysis features room occupancy average; average daily room rate; revenue per room and profit before tax per available room.

Internet bookings are now the biggest source of reservations accounting for 43.2% versus 41.7% for direct enquiries. Internet bookings, which include online travel agencies such as booking.com and Expedia and deal sites like Grab One and Done Deal have increased by almost 50% since 2006.

Crowe Horwath partner Aiden Murphy (pictured left with tourism minister Paschal Donohoe) commented: “The fortunes of the Irish hotel sector improved again in 2014 with increases recorded in all key performance metrics such as occupancy, average room rate and profitability.

“Notwithstanding recent modest room rate increases, the average rates per room remain almost 16% lower than pre-recession levels. While profit levels are increasing significantly, the returns will need to be directed to much-need renovation of existing stock given that many of Ireland’s hotels were unable to allocate funds during the downturn.”

Murphy added that the primary obstacle to new room supply in Dublin has been the lack of availability of long-term funding to support large capital investment for start-up enterprises. The second challenge is the complexity and timeframes around the planning process which has delayed new hotel developments for the city. “We would urge immediate attention be given to fast tracking a pipeline of new supply to meet the growing level of demand in the Dublin market,” said Murphy.

According to Crowe Horwath, The Irish hotel sector has 814 registered hotels. In total, Irish hotels provide 56,740 rooms, 77% of which are classified as either first class (four-star) or mid-price (three-star) hotels.