Commercial real estate advisor Savills Ireland has estimated that Dublin’s hotel development pipeline will shrink by up to 32% as a direct result of the Covid-19 pandemic.
As the boom in visitor numbers to the capital over the past decade has seen the addition of some 4,000 new hotel rooms, the immediate impact of the coronavirus on the tourism sector has prompted Savills to cut its forecast for the delivery of 5,926 new rooms between March 2020 to the end of 2022, to 4,057.
Commenting on the figures, Tom Barrett, director of the hotel division at Savills, said: âJust a few weeks ago, before the current restrictions, Savills visited hotel construction sites in Dublin to observe the physical progress. Based on these visits – and our own analysis – we expect hoteliers, developers and investors to complete most of the projects that have started construction, although delivery and opening dates are slipping. “
While Savills’ analysis suggests that the majority of the hotel room stock slated for completion by 2022 will still be delivered, the report notes that “the probability of opening is highest for hotels already. significantly completed, with a greater risk of delay and reallocation for sites that have not started or are in the very first phase of development â.
A closer look at the numbers shows that of the 1,150 new hotel rooms slated to open this year, over 90% of those new hotels had their top floors, or full facades and glazing in place before Saturday closed. last of construction sites.
Savills says he expects the completion dates for these hotels to slip into 2021 if the government’s restriction on non-essential construction continues longer than expected.
Of the 2,200 new hotel rooms due to open in 2021, the report finds that only 25% of these hotels had reached the top floor before their sites closed. The prospects for stopping these projects remain weak, however, with Savills noting that “very significant work has been carried out on all of these hotels”.
Turning to 2022, the report states: âThe hotels that we believe could open in 2022 are in the early stages of construction. As a result, Savills significantly reduced its overall forecast for that year.
âWith a reduced development forecast for Dublin hotels, we believe that the development of new hotels in Cork, Galway, Limerick and regional Ireland will be more difficult to achieve in the years to come. “