Hotel occupancy plummets while outlook for coming six months remains negative

Data released on Friday details the crisis facing the hotel sector with occupancy for the few outlets which remain open standing lower than 10 per cent in the Republic.

According to research from travel research company STR, occupancy dipped in Dublin by a quarter to 55.1 per cent in the year to the end of March while the average daily rate fell by 6.6 per cent to €115.47 compared to the same period in 2019.

The picture worsened in April with most hotels shuttered and those remaining open catering to frontline care workers.

And the outlook from STR suggests that the pick up will not be swift. By March 4th, almost 50 per cent of rooms in Dublin for the month of May were already booked. By April 4th, that had fallen to 18 per cent for the month. August was, however, pacing ahead of last year in Dublin although that’s attributed to a scheduled Notre Dame vs Navy Football American football game scheduled for the month which has yet been officially cancelled. As of April 4th, August bookings were for close to 38 per cent of capacity.

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While the outlook in the capital is negative for the coming six months, "we are starting to see some shoots of green in September, October and further out," said Sarah Duignan, director of client relationships at STR.

But, she noted that cities such as Dublin and London will take longer to return to normal because of their reliance on international travel. Ms Duignan added that a resurgence in so-called "staycations" could boost regional Ireland occupancy.

Global pandemic

STR’s data shows that all markets and hotel varieties have suffered as a result of the global pandemic which has all but ended global travel and virtually closed economies worldwide.

Occupancy for Luxury hotels in the year to March is down by 32.4 per cent while the economy class was least affected in the period, losing 16 per cent of its occupancy.

Ms Duignan said that she expects economy to rebound quicker than the luxury segment of the market which is reliant on overseas tourists.

The performance of hotels in the Republic has been worse than their UK counterparts, with occupancy down 80 per cent for the week from March 16th to March 22nd compared to a drop of 67 per cent in the UK. For the week of April 13th to April 19th, occupancy here was down 90 per cent compared to the same period last year while the UK had shed 78 per cent of occupancy.

“All markets have bottomed out,” added Ms Duignan.