Worker shortage and rising costs ‘could hit Dublin hotel market’
DUBLIN’S booming hotel market is not overheating, but some projects will be delayed because of a shortage of construction workers and a difficulty in obtaining funding, according to the boss of Ireland’s biggest hotel group.
Estate agents Savills has forecast that 6,300 additional hotel rooms will come on stream in the Irish capital between 2020 and 2023, with almost 2,500 of those due next year.
That would bring the total number of hotel rooms in Dublin to about 28,300.
Dalata has four hotels in Northern Ireland, including a Clayton hotel in Belfast’s Ormeau Avenue, a Maldron hotel in the city centre and others at Belfast International Airport and in Londonderry.
The business uses the services of Co Tyrone-based construction group McAleer and Rushe as a contractor, and last week confirmed that McAleer and Rushe would be its construction partner for a new hotel at Croke Park in Dublin. Dalata noted yesterdramatically day that construction costs in Ireland had jumped 15% in the past two years.
Chief executive Pat McCann said: “That’s going to be a big problem.
“People won’t get the returns now that they would have got if they had done it (built hotels) three or four years ago. That’s the reality.
“Two things will happen. They’ll find it hard to get builders, and if they do (get them), they’ll find it hard to get funding based on the new dynamics. That slows down potential development.
“When I look at anything that’s supposedly coming in 2022, nothing has started.”
Dalata currently controls about a fifth of the hotel rooms in Dublin.
There are dozens of planned hotel projects for the city, including new properties and extensions.
Companies such as the UK’s Premier Inn group, owned by Whitbread, have been actively buying sites for new hotels.
A number of new high-profile properties have opened, including the €55m (£46m) Marlin hotel and the Moxy, a brand owned by Marriott.
The hotel boss was speaking as Dalata reported pre-tax profits of €89.7m (£75m) for 2019, up 2.7% on 2018.
Revenue at the group, which is continuing to expand its footprint both in Ireland and the UK, was 9.3% higher at €429.2m (£358m).
Mr McCann also indicated that despite widespread alarm, the business had not been impacted by the coronavirus.