Room occupancy shows the demand for more hotels in Cork

Room occupancy shows the demand for more hotels in Cork
An image of BAM's planned Sullivan's Quay Development .

NINE-OUT-OF-TEN hotel beds were occupied in Cork this summer, with average room rates increasing to more than €100 per night.

The data, compiled in a recent report by Fáilte Ireland, illustrates an urgent need for an increase in tourism accommodation, according to the tourism development authority.

The report shows that room occupancy and average nightly rates have been increasing year-on-year since 2013.

It also notes that as many as 1,200 rooms are in the pipeline for Cork city but many of these will not be realised until 2022, if at all. However, it also states that in the face of economic and tourist downturn, ‘at worst’, 600 new beds are still likely.

A look at the proposed Metropole hotel and new M hotel Cork
A look at the proposed Metropole hotel and new M hotel Cork

Last year, Fáilte Ireland reported that 2.7 million tourists visited Cork, comprising both domestic and overseas visitors, generating revenue of more than €830 million.

Specifically, in the context of Cork city, tourism numbers grew continuously over the last five years.

The Fáilte Ireland report notes that the average room rate increased from €68.18 in 2013 to €102.99 as of September 2018.

Workers putting the finishing touches to the exterior of the new Maldron Hotel, South Mall, Cork City. It's due to open on Tuesday.Pic; Larry Cummins
Workers putting the finishing touches to the exterior of the new Maldron Hotel, South Mall, Cork City. It's due to open on Tuesday.Pic; Larry Cummins

Similarly, occupancy increased from 75.2% in 2013 to 81.6% in 2018.

While Fáilte Ireland visitor data indicates that 40% of visitors to county areas in 2017 were domestic, the Irish market, in contrast, accounts for 65%-70% of business to the city’s hotels. Strong demand from the domestic corporate sector, and from overseas corporates via Cork Airport, therefore spreads out visitor numbers across the season.

Data from Trending.ie indicates that demand is seasonal, but that occupancy in the off-peak months is nonetheless relatively good. January is shown to be the month with the lowest occupancy, averaging 59% in both 2017 and 2018, while August is the month with highest occupancy, averaging 93% in 2017 and 92% in 2018.

The report notes that hotels dominate the tourism accommodation market in Cork, accounting for 80% of all bedspaces. The data does not include Airbnbs, except for those registered with Fáilte Ireland as serviced apartments, though.

Most of the hotel accommodation in the city is 4-star, which accounts for 70% of all beds, showing the shortfall in budget accommodation in the city.

As such, the recent planning approval of the development of a budget hotel next to Parnell Place bus station is a significant development within the market.

The development is just one of 14 proposed in the city. The first of these — the Maldron on the South Mall — is just days away from opening its doors.

Permission has also been granted for work at the Kingsley Hotel and the Metropole, as well as new developments at Sullivan’s Quay, Horgan’s Quay, MacCurtain Street, and Prince’s Street, while the proposed redevelopment of the Wilton Shopping Centre also includes a hotel.

However, just a few of these are expected next year with 755 due for delivery between 2020 and 2022 at present.

The report states that the ‘central projection’ is that 934 new rooms will open in Cork in the next five years.

“This represents growth of one-third on the existing room stock. If robust growth continues, and one or more of the other developments that currently have planning or are in planning come to fruition, then this figure could grow to about 1,200 rooms.

“At the same time, there is also considerable room for downside to the central projection. Even if there is a perceptible downturn in tourism growth (and the general economy) over the next 18 months, projected additional room numbers should still at worst be close to 600.”

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