Crowe and JLL co-hosted the Irish Hotel Sector Briefing on Thursday 23 January 2025 in the Intercontinental Hotel in Ballsbridge, Dublin 4. We were delighted to welcome over 200 industry guests at this in-person breakfast event. Weldon Mather, Director of Hotel, Tourism & Leisure at Crowe moderated the guest speaker slot with Shane Casserly, Deputy CEO of Dalata plc, while Dan O'Connor, Head of Hotels & Living at JLL provided an update on market transactions and Aiden Murphy, Corporate Finance & Recovery Partner at Crowe gave an update on industry sentiment, asset management and market outlook for 2025.
Aiden Murphy presented a 2025 status and trading update for the Irish hotel sector to an audience of industry stakeholders and partners. He detailed how next year many hotels may experience an increase to their cost base, potentially exceeding any increase in revenues and presenting a risk that many hotels could record a dip in their profits.
Aiden said that we are in a period of lower revenue growth as existing occupancy for Ireland’s hotels is already at peak levels. Average room rates have grown significantly over the last few years, with the industry potentially facing a pause in upward momentum.
He also noted that with higher levels of travel, the continued rise in the number of people in employment and the strong domestic economy, we should not be surprised to see a resumption of positive room rate growth sooner than many anticipate.
Aiden said that 2025 would be a year of “Asset Management” with the objective of optimising cash flow. He advocated that an Asset Management-based approach should be adopted to help ensure that any asset is performing optimally, supporting additional revenue growth during a challenging phase of the cycle.
A primary focus for hotel owners should be re-investing in its asset base to ensure that they are aligning them with the incoming EU green regulations. Focusing on reducing a hotel’s carbon footprint and operational footprint can also support operators’ balance sheet strength. Lower and more efficient energy usage will reduce costs, while stronger green credentials of any asset will allow an operator access to cheaper capital, reducing its cost of financing.
Aiden noted that the growth momentum in recent years has not created payroll efficiencies, as wage rates, salaries and employer costs have increased rapidly and are continuing to do so. He noted that an Asset Management strategy should include technology and automation to allow the hotel to operate with fewer people, which will become more important in an economy where the labour market remains tight and there is ongoing upward momentum of labour costs for employers.
In summary, Aiden said he was cautiously optimistic about the potential for hotels to protect their profit levels, especially for hotels that adopt an active Asset Management approach with a range of specified cash-flow-enhancing initiatives.
Dan O’Connor noted that over €1 billion in hotel transactions was recorded in the past 12 months, which is a record high. This figure was driven by a number of large Dublin hotel sale transactions, including The Shelbourne, The Hard Rock and the Radisson St Helen’s. Dan believes the year ahead could see €750 million in transactions and it is likely to be another busy year with more provincial Irish transactions than we saw in 2024, which was more Dublin-focused.
One of the larger changes over the last few years is a trend where more hotel transactions now involve a share sale arrangement. This has added complexity to deals, requiring greater management and oversight from the agent to bring all parts of the deal together and bring it to completion. The other notable trend is the inclusion of bank loans to complete the deals, with the vendor being required to address the requirements of both the purchasers’ and the lenders’ solicitors.
JLL have responded to these evolving market conditions and purchaser due diligence reviews as part of the sale process by investing in their technology platform. JLL’s platform now manages the various documentation, tracking and assisting its status and helping to ensure that the sales process is completed in a timely manner. Separately, as an international company, JLL have centralised information systems that can be interrogated to provide details of parties who have expressed interest in a particular location and type of hotel, thus enhancing target lists when reviewing deals and bringing properties to the market.
Shane Casserly, Deputy CEO of Dalata Hotel Group, also shared his perspective on the company’s growth ambitions and priorities. He expressed satisfaction in Dalata’s success in creating exceptional hotels across various cities, supported by a strong team with a proven track record of delivery.
Looking ahead, he outlined plans to replicate the company’s UK momentum across Europe, focusing on destinations with a balanced mix of leisure and corporate visitors. Dalata’s target cities typically feature markets with over 40,000 hotel bedrooms, ensuring a healthy demand base, and targeting locations that have strong international and domestic demand drivers. The UK remains a key target market for Dalata’s growth strategy, with a focus on larger cities such as Edinburgh, Manchester, Glasgow, Birmingham and London. Dalata already has a footprint in these cities and sees opportunity for further expansion, supporting its ambition of 21,000 rooms by 2030.
Regarding the Irish hotel sector backdrop, Shane outlined how delays in Ireland’s planning processes are hindering development, with elongated lead-in times for development often leading to increased holding costs that can render projects unviable. He cited examples of other jurisdictions with far more efficient planning processes that Ireland should seek to emulate. For example, in Edinburgh where Dalata is developing a new hotel, Shane said that they were able to complete a pre-planning process with the local authority as part of their purchase due diligence. This helped accelerate the planning process and, post-acquisition, Dalata was able to obtain the planning consent and be on-site within 12 months.
Beyond growing its footprint across Europe, Shane highlighted that a key focus for Dalata is continuing to invest in technology and its people. Dalata’s ambition is to be the employer of choice in the hotel sector, attracting talented and ambitious people who want to grow their careers. Dalata was able to recruit from its internal workforce when building out its management team across the four new hotels it opened in 2024. This approach has significantly streamlined the launch of new properties, ensuring operational readiness from day one. Talent development remains a top priority, with plans in place to recruit 50 graduates in 2025 through Dalata’s graduate programme.
While technology plays a pivotal role in Dalata’s operations, its emphasis is on enhancing the guest experience, improving efficiency and security. In terms of technological investment, Shane noted that the roll-out of their check-in pod systems has significantly improved the guest experience at check-in and the front office staff benefit as their focus shifts to welcoming their guests rather than the process of information collection and input. Shane also noted that the use of QR codes was beneficial in food outlets, and where customers were reluctant to use these, staff would use mobile devices to communicate with the kitchen as regards the order and progress on service.
Shane stated that he hoped there would be a resolution soon for the Dublin Airport passenger cap, as part of the formation of the new government, as this is really important for Ireland, where Dublin is the main arrival point for tourists. The experience elsewhere is that a gateway airport would be seen as national infrastructure and would not be subject to the same level of control by a local authority.
Crowe is Ireland’s leading consultancy practice for the hospitality, tourism and leisure industries. With unmatched expertise, we assist clients in the sale, acquisition and development of businesses across the sector, supporting owners, developers, financial institutions and industry stakeholders.
Our dedicated Hospitality, Tourism & Leisure division, Horwath HTL, is the oldest and largest consultancy practice of its kind globally and a member of the UNWTO. Since 1995, Crowe has produced the Ireland Annual Hotel Industry Survey, providing critical benchmarking data and analysis by region, classification and hotel size.
We bring together international experience and local insights to deliver tailored solutions. Our services include due diligence, appraisals and valuations for hospitality acquisitions, offering support for investors and funders.
To learn more about how we can help you make smart decisions today that create lasting value for your business, contact our HTL team.