Dublin recorded the fastest increase in hotel transactions and revenue per room of seven European cities in 2014, according to a new report by Savills.
The European Cities hotel report points to a major increase in hotel transaction volumes across Europe’s smaller cities, with totals rising by as much as 94% in Dublin to €234m and 39% in Berlin to €411m in 2014.
The growth is being driven by availability constraints in London and Paris, rising visitor numbers and operational performance improvements which are boosting investor confidence, according to the firm.
Additionally, Savills found that hotel transaction volumes across the seven gateway European cities, which also include Madrid and Amsterdam, rose by 2.3% to just over €5bn last year compared to €4.89bn in 2013. Despite growth in the smaller cities, London and Paris continued to lead with 45.5% of total transactions in the former, equating to €2.3bn, and 26.1% of transactions in the latter, equating to €1.3bn.
Reflecting a 9% rise in foreign visitor trips to Ireland last year, a plummeting euro and an upturn in the local economy which has driven domestic leisure demand, Dublin recorded the fastest growth in Revenue Per Available Room (RevPAR) across all European cities studied. RevPAR, a standard industry performance metric which is calculated by dividing hotel room revenue by the total number of rooms, rose by 11.3% in Dublin. The next best performing city was Madrid with 10.2% RevPAR growth. This was followed by Amsterdam and Berlin, with the major tourist capitals of London, Rome and Paris showing much lower rates of growth.
Commenting on the report, Savills director of Hotels, Tom Barrett said: “Ireland’s hotel market has benefitted significantly from an increasing number of overseas visitors – particularly from the US and UK. With the euro continuing to weaken against the dollar and the pound, this is a trend that is likely to continue. Therefore we expect demand from hotel investors – both at home and abroad – to remain strong in 2015.”