A likely reduction in the volume of corporate travel to Dublin after the Covid-19 crisis has passed will hit the hotel sector, but will be more than offset by the greater footprint of international businesses active in the capital, according to a new report.
The report from global property group CBRE, The Future of Demand for The Dublin Hotel Market, considers what the Dublin hotel market will look like once international markets re-open.
It says there are currently 4,075 hotel rooms across Dublin City, with hotel stock expected to reach just under 26,000 bedrooms by 2023. CBRE expects in the region of 2,000 additional bedrooms will go onsite in the short term.
The report says there was about 2.8 million sq m of office stock in Dublin city centre at the end of 2020, which was an increase of 14 per cent since 2010. CBRE describes the level of space take-up by new multinational occupiers since 2014 as “nothing less than exceptional”.
The top 10 information and communications technology (ICT) employers in Dublin have increased their committed and occupied space by 259 per cent since 2014. Together they account for about 451,000sq m or 16 per cent of the overall market.
"These employers include Google, Facebook, LinkedIn, Salesforce, Amazon, Indeed, Twitter, Intercom and Zendesk and we understand from media reports that Tik-Tok will be joining them," says the report.
“It is worth noting this is only the top 10 ICT employers. What is most significant is that of the space committed to by these multinationals, 250,000sq m is not yet occupied and this will deliver an estimated headcount of just under 20,000 and a doubling of their footprint in Dublin.”
The report acknowledges that the pandemic “may result in some long term changes” to modern office accommodation, but points out that the make-up of office-based employers is “increasingly international in nature” and is more likely to require hotel accommodation.
“Given the disruption caused by Covid and the corresponding acceleration of communication technology, it is clear the volume of corporate travel will be impacted,” it continues. “Overall corporate travel may reduce by between 19-36 per cent.
“If the Dublin hotel market is split approximately 50:50 between corporate and leisure business, a 19-36 per cent decline in corporate business equates to a 9.5-18 per cent fall in hotel rooms business, assuming no change in the population and volume of travellers.
“However, it is clear that the capacity for Dublin is growing substantially in both leisure and corporate sectors. The growth in leisure will come through population growth and returning connectivity from global markets and corporate business will exceed previous levels.
“We assert that any reduction in corporate travel will be more than offset by the greater footprint of international businesses active in Dublin given that the top 10 technology employers will see their footprint in Dublin more than double in the next 24 months.”
