As Ireland's decade of commemoration hit top gear in the run-up to Easter, the ability of Ireland's recovering hotels sector to capitalise on the opportunities the centenary celebrations present has become increasingly evident.
Data released by STR, a group specialising in data of the global hotels market, says that revenue per available room (RevPAR) – a key industry metric – has continued to grow at the breakneck pace of 2015. RevPAR growth of 23.2 per cent for the first quarter almost precisely matches the rate of growth reported by PwC for 2015. At the time it was expected that the rate of growth in Ireland would moderate this year, albeit delivering continued strong returns.
The STR data indicates that there has been no moderation. And a breakdown of the figures shows that the bulk of the increase in RevPAR over the first quarter of the year has been accounted for by increased room rates.
The PwC report forecast that room rates would jump 10 per cent this year. According to STR, hoteliers are doing markedly better, with average room rates jumping 17.6 per cent year-on-year in the first quarter – and by more than 22 per cent in the month of March.
Clearly there are specific factors that will have distorted the data, not least Easter falling in March this year and, of course, the 1916 centenary celebrations and the early season tourists they brought.
News that the month of March saw hotels outside Dublin fare even better in revenue growth terms than the capital will certainly be welcome – as will the fact that increased occupancy is playing a bigger role than in Dublin.
But it is becoming increasingly untenable for the industry to argue the case that it should continue to be protected by a special low rate of VAT.
Growth in occupancy of close to 5 per cent across the State would, by itself, point to a sector that it doing well without requiring specialist support, but the rapid increase in room rates close to levels last seen at the market peak in 2007 suggests that much better use could be made of Exchequer resources.
