Manufacturing & Supply Chain

After almost a decade of inactivity and as the cost of providing new accommodation now is more aligned with its earnings potential, a strong pipeline of new hotel  accommodation stock is expected to improve tourism capacity pressures in Dublin by 2020. However, this activity is still being outpaced by growing demand and an expected shortfall of at least 1,100 rooms is still predicted for the city by then. These were the headline findings in An Analysis of Tourism Accommodation in Dublin, a new report published by Fáilte Ireland.

Commissioned by the national tourism body, the analysis was carried out by Fitzpatrick Associates Economic Consultants and they estimate that, from 2018-2020, a total of 5,436 hotel rooms will come on stream, including over 3,000 already under construction, representing – by Fáilte Ireland’s own estimates – private sector investment in Dublin of €815 million.

Amongst those developments expected up to 2020 two out of three of the additional rooms will be in new hotels, approximately 40% will be in the Dublin 2 and 4 area, and one in seven in the Dublin 1 prime area (the North Docks and along the route of the Luas extension in O’Connell Street and Parnell Square). The rest of Dublin 1 and Dublin 8 account for over 1,500 of the projected new rooms.  Another 460 rooms expected at or close to the airport, an area that experienced the highest levels of occupancy across the entire Dublin region in 2017.

Fáilte Ireland estimates that every additional 200 bed hotel generates tourism revenue of €9m, creates 180 jobs and contributes €2m per annum to Exchequer earnings. The additional hotel bedrooms expected to 2020 should generate approximately 5,000 jobs, €250m in tourism revenue and €55m annually for the Exchequer.

Fáilte Ireland CEO, Paul Kelly said: “Dublin is the gateway to Ireland with most visitors choosing to spend part of their stay in the city. Therefore, if visitors cannot access Dublin, it is highly likely they may not visit the country at all. That is why capacity in Dublin is not just an issue for the city but affects all who work in tourism – whether in Kerry, Louth, Waterford, Donegal or any point in-between.

“While it is great to see such positive capacity increases in Dublin accommodation we need to ensure that our capital can cater for future demand if we are to sustain tourism growth. Growth in international visitor numbers and revenue is not only great news for employment but also for government finances, with 23 cent in every Euro of tourism spend finding its way to the exchequer. The tax take from tourists is now the equivalent of over €1,000 for every household in Ireland – generating €1.6bn in all which helps fund education, and other important sectors. There is still a huge opportunity to further grow the contribution of tourism but, amongst other things, we need to ensure that Dublin can cater for more visitors.

“The report indicates that we will continue to have supply and demand pressures in the city. Given current and projected levels of visitor demand, there is certainly still a strong incentive for more investors and businesses to move into the sector. Importantly, any additional rooms and capacity in Dublin will not just benefit tourism but the economy as a whole.”