Hotels in Dublin are dealing with 'exceptional levels' of advanced bookings over the summer months, according to the Irish Hotel Federation (IHF).
This coincides with an unprecedented reduction in Dublin hotel room stock that would normally be available to supply tourism accommodation.
As a result, many hotels are nearing full capacity on busy days earlier than in previous years.
A total of 80 per cent of available Dublin hotel rooms for the month of June had already been booked in advance by the end of May.
This is a significant increase on pre-pandemic levels in 2019, when the advance bookings for June stood at 65 per cent at the end of May.
Tim Fenn, IHF chief executive said: “The recovery is being fuelled by very significant levels of pent-up consumer demand – both domestically and internationally.
"At the same time, many Dublin hotels are managing unprecedented levels of displaced business including group bookings that had been previously contracted back in 2020 and 2021.
"Dublin hotels are also experiencing substantial increases in demand from activity within the wider economy, for example with large-scale commercial construction projects having restarted.”
Hotel stock
Dublin has 22,492 registered hotel rooms. IHF research shows 17.6 per crent of these (3,960 rooms) are currently unavailable for use as tourist accommodation: 15.2 per cent (3,410 rooms) are contracted by Government and State bodies while 2.4 per cent (550 rooms) are out of service due to reduced staffing levels.
Mr Fenn notes that hotel capacity issues are further compounded by shortfalls in additional Dublin hotel stock coming on stream due to delays in construction activity during the pandemic.
The combined effect of these exceptional factors is that there are now more nights, particularly at weekends and on nights when there are major events, where hotel room occupancy in Dublin exceeds 90 per cent (compression nights) and the last available rooms are quoted at rates in excess of the average daily room rate.
He said: “What is often lost in the commentary is that the vast majority of rooms currently sold have been contracted and previously booked well in advance at rates significantly below the last available rates.
"Actual average price increases have been much lower with overall value for money in the market in Dublin remaining competitive with our European peers relative to the very high quality of our hotel and guesthouse product.”
Average room rates for Dublin hotels in April this year were €154 and early indications are that the average rate for May was approximately €177, a 15 per cent increase on May 2019.
This is in the context of hotels experiencing spiralling operational costs with year-on-year increases of 88 per cent in energy, 18 per cent in food and beverage supplies, over 30 per cent in linen services and 20 per cent in insurance costs.
Despite the level of bookings, Mr Fenn said it is likely to be a "short-term disruption" which will be resolved as demand eases and further hotel room stock comes on stream.
