Dublin city centre evolving to meet strength of hotel demand from visitors and investors

Few European cities kept their hotels as full as Dublin did this year. Occupancy reached nearly 85 per cent in the 12 months to September, according to CoStar, despite the headwinds facing global travel in 2026.

To understand the trend properly, I looked at visitor and occupancy data and spoke to a number of hoteliers. A decline in visitor numbers followed the outbreak of war in Iran and ran into early spring while the World Cup in the US had an impact on the tourist spend that would ordinarily have come to Ireland in early summer. However, the market recovered strongly through the rest of the busy season and beyond, and the data bears that out.

I attended the Irish Tourism Industry Confederation (ITIC) conference at Dublin’s Convention Centre in October to get a better sense of sentiment across the sector. The feedback from operators at the conference broadly reflected this view. The confederation highlighted a slight year-on-year decline in North American visitor numbers during August, which was attributed to fewer US travellers visiting for the College Football Classic than in previous years.

The issue of hotel room rates is more complex. According to CoStar, average room rates grew by 1.3 per cent in the nine months to September compared with 2025, with the average daily rate (ADR) reaching €177.80, a strong level for a market running at such high occupancy. This growth has not kept pace with Ireland’s consumer price index, however, which has run at more than 3 per cent over the same period.

Overall, the fact that occupancy held at such a high level this year despite such pressures is evidence of the market’s underlying resilience. Higher fuel costs and impending increases in the price of travel are the challenge for the winter months.

Irish weather

One of the most interesting contributions at the ITIC conference came from US ambassador to Ireland Ed Walsh, who spoke about the growing appreciation Americans have for the Irish summer, particularly the one just gone. Heatwaves have become more common across southern Europe in July and August in recent years, and northern European destinations have benefited as a result. Ireland’s famously unpredictable and changeable weather may well have become one of its greatest selling points.

The ambassador was also upbeat on the prospects for Irish-American tourism. He pointed to the potential for further events such as a college basketball game to extend the event calendar into the quieter winter months.

The Ryder Cup, the NFL and a strong events pipeline

Looking ahead, the events calendar is just as encouraging. The Ryder Cup at Adare Manor will be among the largest sporting events Ireland has ever hosted, with 280,000 spectators expected, and hotels are already booking out well beyond Limerick.

Beyond golf, last year’s inaugural NFL regular season game at Croke Park was among the best weekends Dublin hoteliers have experienced over the last decade, with room rates spiking sharply across the city. The NFL is expected to return, potentially within the next two years. U2 will play an Irish date next year as part of their global tour, Dublin will host several games at Euro 2028 and the proposed 20,000-capacity arena in the docklands, being developed by OVG and Live Nation, would add a year-round source of events.

Why Dublin hotels attract capital

Demand like this has not gone unnoticed. Sustained high occupancy over the last number of years has brought increased focus from developers and investors on a sector that historically has not been considered alongside core commercial or residential assets.

Last year the Irish market saw its largest-ever hotel transaction, with Pandox, one of Europe’s largest hotel property companies, acquiring Dalata Hotel Group for about €1.4 billion, the majority of which were Irish assets. Few deals do more to show how sought-after Dublin hotels have become.

Dublin hotels are utilitarian by nature. That is, they sit beside stadiums, convention centres, the airport or other transport hubs. When one considers the convenience of their location and the ongoing undersupply of rooms in the Dublin market, it’s easy to understand how such a high level of capital was deployed in a single deal.

€1bn pipeline

That faith on the part of investors is also showing up in new supply. Dublin’s hotel stock is on course to pass 30,000 rooms for the first time by 2028, with a substantial pipeline of new bedrooms due to deliver over the next two years. At an estimated development cost of €250,000 to €300,000 per key, the committed pipeline of more than 3,500 rooms represents a gross development value of between €0.9 billion and €1.1 billion, a significant statement of confidence in the long-term fundamentals of the market. The majority of this new supply consists of budget, long-stay and midscale accommodation.

Evolving city centre

The city centre is evolving in its composition, a trend I examined in an Irish Times article in July 2024, What impact will remote working have on the future of Dublin city centre? One of the central findings was that the city would move towards a greater mix of hotel, residential and living sector uses over time. And that has increasingly been borne out.

Some developers are now repurposing city-centre buildings for hotel use, and a number of former banks and retail units have planning permission for it. The former Cafe Kylemore on O’Connell Street was recently sold with permission for a boutique hotel, and a five-star hotel is planned for the former Ulster Bank premises at College Green, to name two. Not every project materialises, however. Numbers 5-9 Frederick Street South came to market with a feasibility study showing hotel potential, but was acquired, refurbished and upgraded as an office scheme, now let to Cantor Fitzgerald.

What comes next

Adding more than 3,500 rooms to a market this full should bring some normalisation of trading levels. The events pipeline, record passenger numbers through Dublin Airport, and Fáilte Ireland’s sharp focus on growing visitor numbers all point in the right direction. Dublin remains one of the more attractive European hotel markets for investors.

Colin Richardson is a senior director and head of research at CBRE Ireland