The Hotel Monitor 2024 by American Express Global Business Travel Consulting showed high occupancy levels in Dublin, particularly in luxury hotels, are fuelling room rate growth. This high level of demand amid a chronic supply shortage of available rooms has put added pressure on the market, especially with “a lack of alternative providers around the city”, the report said. “These factors will likely allow hotels in the Irish capital to command significant rate rises next year,” said the report. Rates being offered by hotels in Ireland have already reached eye-watering levels.
Dalata, Ireland’s largest hotel operator, reported revenue per available room was €109.41 during the first six months of the year, up from €86.61 last year, following price increases. The owner of the Clayton Hotel said its occupancy rate across its group stood at 78.4%. The report predicted hotel room rates in the city will grow by 10% next year, almost at the same pace as hotels based in some of Europe’s most popular travel destinations including Paris and Amsterdam. Dublin is somewhat of an outlier in the report as it showed rates and occupancy are no longer as closely linked elsewhere as they have been previously.
Low occupancy traditionally triggered hotels to lower rates, but operators are increasingly willing to accept lower occupancy levels as long as they can raise their rates, according to the report. “This is especially the case in destinations where hotels cannot deploy their full inventory because of staff shortages,” the report said. “In practice, this means traveling off peak may no longer deliver previously available levels of savings as the link between rates and occupancy weakens,” it said. Inflation has also contributed to rate increases as the rising cost of doing business has hit hotel operators in Ireland and abroad. The report said staff costs were recorded as the biggest operating costs for hotels.
