Failte Ireland: Dublin Visitor Accommodation Study Confirms City Faces Capacity Crunch over Next Few Years

Published on : Wednesday, June 15, 2016

Dublin-smallFáilte Ireland Commissioned Report Recommends a Number of Short and Long-term Actions to tackle Issue


An independent report, Analysis of Visitor Accommodation in Dublin 2015-20 by consultants Fitzpatrick Associates on behalf of Fáilte Ireland, indicates that Dublin will face an ongoing shortage of visitor accommodation from 2016-2018 even though there are a number of hotels in the pipeline. This shortfall could limit the potential for tourism growth in the longer term and threaten the city’s competitiveness as a visitor destination.

The report, commissioned by Fáilte Ireland, estimates that, after almost ten years of inactivity, a strong pipeline of new accommodation stock is set to come on stream with an additional 5,550 bedrooms projected. However, most of the new stock is not guaranteed and, in any case, will not be available until 2018 or later. Even under the most modest growth scenario, the city faces a capacity challenge over the next two years.

Welcoming today’s report, the Minister of State for Tourism and Sport, Patrick O’Donovan TD, said:

“Minister Ross and I welcome the detailed analysis provided by this report and will be considering the recommendations in consultation with the relevant tourism and State bodies.  While I note the report’s findings that suggest the accommodation capacity pressures in our capital may ease from 2019 on, there are serious challenges in the intervening period.  It is vitally important that we keep the focus on value and competitiveness.  We must remember that, since seven out of ten visitors to Ireland will stay in Dublin at some stage in their trip, whether it is their sole destination or a gateway to the rest of the country, the issues outlined in this report have a national impact.”

“If we are to enjoy sustained growth in tourism nationally, I believe it is incumbent on all tourism stakeholders, where we can, to help create the right environment for the tourism sector to expand and meet the inevitable growth in demand for accommodation which Dublin is facing.  In that regard, I am pleased to report that, in line with both the Tourism Action Plan and this report’s recommendations, Minister Ross recently approved Fáilte Ireland’s revised hotel Regulations, which are due to come into force later this year.  The changes should allow hotel operators provide more rooms and operate at a lower cost base, therefore improving hotel capacity, competitiveness and profitability.”

In the light of the growing imbalance between visitor growth and accommodation supply, today’s report makes a number of immediate and other recommendations.  In the short term, the report suggests a number of corrective initiatives, including:

• Greater market intelligence through the ongoing monitoring of trends, particularly the supply pipeline, to inform debate and decision-making;

• liaising with the city’s planning officials to help bring about greater  efficiency and more certainty for those seeking to put new tourist accommodation stock in place, including –

o streamlining or fast-tracking the planning process
o adopting a strategic development zone approach for hotels and related developments
o supporting the case-making for such developments

• formal initiatives to help better spread demand across the season and across the city and county;

• Improving transport links to locations outside the city and suburbs.

Amongst other actions, to ensure that there is a sustained balance between supply and demand, the report recommends that there is greater site intensification, particularly through:

• an updating of the existing statutory accommodation regulations, particularly those of hotels, so that they reflect contemporary consumer preferences aligned with international norms and allow for greater flexibility to maximise the usage of room spaces;

• An examination of current maximum allowable heights with a view to increasing the number of storeys on a building to create more bedrooms from the same footprint.

Speaking today, Fáilte Ireland Chairman Michael Cawley, said:

“The report indicates that there are a potential extra 5,500 bedrooms due to come on-stream but even these are not guaranteed and it is imperative that we do all that we can to facilitate them. Even if these new rooms are realised, in the short term, Dublin is facing a supply challenge which could ultimately threaten its competitiveness as a tourism destination. Any near term change to the city’s perception for good value could have long term consequences for Irish tourism.
“It is imperative that any unnecessary roadblocks to a greater accommodation supply are dealt with. For our part, the Fáilte Ireland Authority have recently signed off on revisions to the existing hotel regulations – as recommended by today’s report – which will allow for greater flexibility for existing and new operators while providing standards in line with our overseas competitors. I would ask other interested parties in Dublin to look to where they can play their part in implementing the report’s recommendations so we may fully realise the revenue and jobs which tourism has the potential to provide.”

The report also points to some of the causes for the current imbalance between supply and demand with much of the challenge generated by the fall-out from the rapid downturn in 2008-2010. These include:

• the collapse in investment confidence and appetite across this and many other sectors and industries caused by the economic and financial crisis;

• sharp falls in hotel occupancy and profitability in the wake of steep demand falls;

• a strong retreat from speculative or development lending by the main financial institutions in Dublin commercial property and a significantly altered risk appetite among lenders that has remained in the period since;

• strong non-hotel competition for attractive hotel sites in prime city locations;

• long lead-times and uncertainty and risk associated with many phases in the development cycle;

• asset deleveraging among investors faced with legacy debts.

Commenting on today’s report, Fáilte Ireland CEO Shaun Quinn emphasised:

“Between 2010 and 2015, tourist arrivals to Dublin grew by 33%, yet the stock of available accommodation actually fell by 6%. Given this stark fact, and with further visitor growth anticipated, Dublin’s shortage of tourism accommodation may now be the biggest challenge facing the continuing growth of Irish tourism.
“We face acute pressures until 2018, at least, but I would caution all in the industry to keep an eye on competitiveness. Supply will eventually improve with the right environment but, if we lose our competitive edge in the meantime, demand could well soften – and that’s a problem which nobody in tourism wants.”



Source:- Failte Ireland


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