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'Hotel shortage hitting business'

The director of hotels and leisure at Savills claims that a dearth of accommodation for the corporate market, particularly in Dublin, has "displaced business" to other locations.



Tom Barrett told the 'Irish Independent' that he believes that the blame for this lies with relatively high funding costs, which are making it difficult for developers to secure financing at rates of 5% because a lot of lenders are choosing to the avoid the sector.
 While he anticipates that Ireland's hotel room stock will increase by more than 3,000 by 2019, he highlighted the fact that in the decade between 1995 and 2005, the country's hotel room stock rose by approximately 45,000 annually before the yearly figure peaked at almost 60,000 in 2008.
He adds that the scale and savagery of the recession continues to loom over the market, but that the "tap has been turned back on", with the projected rise in the number of hotel rooms over the next two years being "meaningful".
He  also believes that this relatively small increase has resulted in concerns about over-supply. He said that both banks and non-bank backers alike are currently embracing a "belt and braces" approach to development proposals and argued that any potential hotel project needs to generate revenue per room of €15,000 to €20,000.



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