Business Irish

Friday 20 April 2018

Hotel sales increase, but there's plenty of room to improve

Ashford Castle
Ashford Castle
Sarah McCabe

Sarah McCabe

HARD-PRESSED hoteliers will welcome new statistics that show a slow increase in the number of hotels changing hands, cementing a recovery that began in 2010.

Data released this week from commercial-property consultants CBRE shows that 13 hotel transactions were completed in Ireland during the first six months of 2013, with a total value of almost €43m.

Some 10 transactions were signed in the last three months alone.

Some of the most notable hotel sales concluded in the first half of 2013 included the sale of the five-star Ashford Castle in Co Mayo, which sold to UK-based Red Carnation Group for an estimated €18m.

Doonbeg Hotel and Golf Resort in Co Clare also went for big money to US property-investment firm South Street Partners.

The 120-bed Clanree Hotel in Letterkenny, Co Donegal, which had a guide price of €1.6m, was sold to a Dubai-based investment company, while the Kincora Hall Hotel in Killaloe, Co Clare, sold for more than €500,000 to a local businessman.

More than half of these hotel sales came from UK buyers while a quarter originated from US buyers. Irish purchasers accounted for 8.3pc of sales.

However, other potential deals are still in drawn-out negotiations while some hotel properties interested in selling have yet to be listed.

"It is now likely to be early autumn before many other hotel properties are officially released for sale, which is disappointing as there is a scarcity of quality hotel properties on the market to meet the strong levels of demand, both from Irish and international buyers," said Paul Collins, head of hotels for CBRE UK and Ireland.

"With the Government's generous capital-gains tax waiver running out on December 31 this year, there is a limited window of opportunity to complete deals with purchasers who will need to have transactions completed by year-end."

Still, the industry's prospects for 2013 look good. As many as 30 hotels with combined values of around €200m could be sold this year, according to Tom Barrett, Savills director of hotels and leisure.

That would be a substantial increase on the 24 hotel transactions last year which are believed to have been worth about €150m.

Sales of hotels slumped in 2008 after a combination of over-supply and lean consumer spending caused a sharp drop in hotel-room prices.

But a steady recovery in deal volumes has emerged in the last two years and occupancy and room sales have improved.

This summer's good weather should provide a further boost to occupancy rates and thus sales prospects.

Indo Business

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