A survey on the outlook for Irish hotel property investment in 2014. Conducted in partnership with the Hotel Property Conference: http://www.propertyconference.ie/

1. Hotel Investment Outlook
Amárach Research
December 2013
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2. a timely study
Our survey of over 70 hotel operators, investors and
professionals gives us a timely insight into:
• The main drivers of hotel property performance as we enter
2014 on a more positive economic note
• The outlook for the sector and the key factors that will
driver growth in the medium term
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3. Timing is everything in investment, and right now the
consensus on hotel property is very positive…
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4. the right time to buy
63%
19%
10%
6%
already past
right now
next year
in 2-3 years
Q. When is/was right time to buy hotel property in Ireland?
Source: Amárach Research, 2013
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5. If ‘now’ is the right time to buy hotel property, then
what does that say about hotel asset prices?
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6. fair value
70%
20%
10%
above fair value
fair value in current market
below what they're really
worth
Source: Amárach Research, 2013
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7. What then is driving the demand for hotel property,
and what are the main constraints?
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8. the main constraints
59%
40%
36%
35%
21%
lack of bank
finance
competition from lack of investor
international
finance
investors
lack of
appropriate
properties
cost of fit out/
refurbishment
Q. What are main constraints on buying hotel property?
Source: Amárach Research, 2013
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9. the main drivers
74%
66%
37%
34%
11%
location
price
trading
performance
condition
star rating
Q. What are main drivers of hotel property purchases?
Source: Amárach Research, 2013
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10. What about the provision of finance for hotel
purchases or refurbishments – now and in the future?
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11. the trend in finance
59%
43%
23%
23%
23%
17%
11%
1%
worse
same
past 12 months
better
not sure
next 12 months
Source: Amárach Research, 2013
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12. If funding is getting better, then where will the best
growth prospects be next year?
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13. growth prospects
Fastest rising hotel asset values in 2014:
Dublin
City
Centre
Greater
Dublin
Area
Main
Tourist
Centres
Galway
77%
31%
29%
14%
Source: Amárach Research, 2013
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14. Finally, what one thing has to change to drive hotel
property values in next 2-3 years?
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15. driving value ahead
“There has to be sustained growth in RevPar performance for another
12 months in order to give confidence that the recent trend upwards is
durable. There also needs to be a more pronounced recovery outside
Dublin to justify a higher valuation.”
“Average room rates need to increase by at least 3 - 5% per year for the
next few years and capitalise on recent increased demand.”
“Nama have to stop beating down rates, if you cant get the room rate
you can't get the return on your investment.”
“Dealing with the still tax based hotels as they come out of the
structures and their viability for continued operation.”
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16. a turning point
We can be very positive about prospects for hotel
property values going into 2014:
• Finance is expected to be more available, while values are
seen as fair for now
• But there are challenges – both on the supply side and on
the demand side – including legacy issues
• Nevertheless, 2014 looks like being a turning point after
seven difficult years
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17. T. 01 410 5200
E. michael.mcloughlin@amarach.com
W. www.amarach.com
B. www.amarach.com/blog
Tw. Twitter.com/AmarachResearch
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