Hotel market continues to heat up
Grand Central Hotel
The weather is not the only hot news in Northern Ireland this summer. Hotel expansion continues to heat up with more rooms opening, so much so that the 9,000 room barrier was smashed in June 2018.
As a result, hotel expansion has been a regular news feature this year with Northern Ireland’s largest hotel, the Grand Central, opening with 300 rooms in June, swiftly followed by new brand, Hampton by Hilton, adding a further 178 rooms to Belfast’s burgeoning hotel stock.
Janice Gault, Chief Executive, Northern Ireland Hotels Federation (NIHF) says: “It has been an interesting year to date with an action packed first six months. There are now 142 hotels in Northern Ireland and over 1,000 rooms have come on stream since January 2018. By this time next year we anticipate expansion will tail off. However, visitor numbers have increased and this has been borne out in the performance figures from STR. These show that occupancy in Northern Ireland is pretty much on a par with 2017 at 74.4% and demand for rooms is up 5.9%.”
Janice continues: “The summer season is going well with anecdotal evidence suggesting an increase in both European and Northern American visitor numbers. Hotel properties in Northern Ireland have also seen considerable investment over the last number of years and this is being reflected in a better room rate in all areas. A number of trends are starting to emerge but it will be several months before the market adjusts to new supply levels. Room rate has held up well and although occupancy levels have had a couple of stutters, in general the industry has coped well with an unprecedented situation.”
Belfast is where the majority of the expansion has taken place. The city has seen five new hotels open in under a year, with expansion projects to increase capacity at a number of others.
Gavin Carroll, President of the NIHF comments: “In the Belfast market there has been a bit of a wobble in terms of occupancy levels. There is certainly a bigger challenge for those selling rooms in the city. On a positive note, tourist numbers are up and we are pleased with the year so far. Room rates have held up and the increase in supply should help the city attract larger conferences and events in the future. It is difficult to forecast what the coming months will bring. The NIHF has been working with STR, the leading benchmarking company to produce a reliable forecasting model for Northern Ireland, which will launch later in the year. This will be an invaluable tool for hotels in particular and for those involved in any aspect of tourism.”
In Northern Ireland, the hotel sector continues to remain buoyant and bullish. Belfast has experienced the strongest growth in terms of occupancy and average daily rate. The market in Derry-Londonderry is also set to expand by similar percentage levels with new projects starting to appear in other locations. The majority of projects are in the 4-star category with many offering a uniquely Northern Ireland experience.