By Eamon Quinn
Occupancy rates in Dublin hotels were at, or close to, full levels in September and revenue growth across the rest of Ireland was up sharply from a year earlier, according to industry figures.
Revenue per available room in Dublin rose 4.1% in the year, while the average daily rate was up 5.2% on an occupancy rate that was down slightly at 92.6%, show the figures from researcher STR.
In ‘regional Ireland’, revenue per available room rose 12.4% in September, while the average daily rate climbed 12% on an occupancy rate that ticked higher to 85.3%. In the year to date, revenue per available room in regional Ireland was up 9.9%.
Joe Quinn, equity analyst at Davy, said an occupancy rate of over 90% suggests that hotels are getting close to being sold out and owners focus on maximising returns.
The figures suggest Dublin is close to capacity and needs new hotels, said Mr Quinn, while elsewhere there is little major increase in hotel rooms, with the exception of Cork where supply is growing.
Mr Quinn said the figures support Davy’s view that stockmarket-listed Dalata Hotel Group “should outperform the broader market given its ongoing efforts to improve yield through areas such as revenue management on a decentralised basis”.
“As we now enter the shoulder months of summer, (average daily rate) will remain central to growth, given occupancy comps for Dalata, particularly in Dublin,” said Davy.
The stockbroker has an outperform rating on Dalata. Dalata shares, which fell almost 3% in the latest session, are up 8% in the past year, valuing the firm at €1.05bn.
