A year marked by an increase in the average sale price for hotels was also a period in which the transactional marketplace reasserted itself, according to Business Outlook 2014, the annual state of the markets report by specialist property adviser Christie + Co.

Dublin’s “safe-haven” status was reaffirmed as it stayed at the forefront of major deals and highest prices. While there was a surge in transactions throughout the country, prices paid for Dublin hotel assets was “aggressive”, as international investors showed appetite for prime capital city assets. Outside Dublin, with the exception of trophy assets, sales were far weaker in price terms. On the positive side there was a noticeable uplift in the level of deal activity.

Maureen Bayley, director of Christie + Co in Dublin, said banking strategy seems set to boost the hotel market still further in 2014. "Following a number of loan portfolio disposals, this should allow the banks to release funding for hotel investment – albeit more cautiously and selectively than in the days before the recession."

Jeremy Hill, head of hotels, said that as we moved into 2014, there remains a substantial amount of equity looking for opportunity.

Capital expenditure
Ms Bayley argued that there were reasons for renewed optimism within the

sector. The Gathering had led to an increase in visitors in 2013. And as the corporate and leisure business continued to grow in 2014 , the hotel market was in a prime position to benefit. Capital expenditure, however, remains a concern for many operators, as much of the newer hotels, developed with the benefit of tax incentives between 2006 and 2008, was starting to show its age.

“As the ‘tax life’ of much of the country’s newer hotel stock comes to a close, it is likely that many more hotels will be brought to market. However, for those that were developed for non-commercial reasons, the pool of buyers is likely to be weak,” said Ms Bayley.

Dublin remains at the forefront of investors’ minds. And as trading performance picks up around the country, other locations will continue to interest selective investors. Dublin city is no longer showing evidence of oversupply and new hotel development would be a welcome addition to the city’s tourism infrastructure and economy.