The Irish hotel market recorded its strongest year on record in 2025, according to a new report from property advisor, Savills Ireland.
The figures show that total transaction volumes exceeded €1.7 billion for the year.
Savills said the record performance was driven primarily by the €1.4 billion acquisition of Dalata Hotel Group, with approximately €1 billion of that figure relating to Irish hotel assets.
The transaction marked the largest hotel deal ever completed in Ireland and significantly altered market expectations, which had initially forecast annual volumes of €500 million to €600 million.
2025 marked a defining year for the Irish hotel investment market, according to Conor Clarke of Savills Hotels and Leisure.
“The scale of the Dalata transaction, combined with a return of institutional capital and consistently strong operating performance, has fundamentally reinforced investor confidence in the sector,” he said.
In total, 66 hotels changed hands during 2025, more than double the number sold in 2019.
Savills said investor confidence improved as interest rates eased, supporting renewed activity following a period of limited transactions.
This was underscored by the €86.5 million sale of the Ruby Molly Hotel in Dublin, the first Dublin hotel investment transaction since 2022.
According to the data, hotel trading conditions remained broadly stable throughout the year.
“While development costs and operational pressures remain, the outlook for both Dublin and regional markets is positive, underpinned by demand, limited supply in key locations and Ireland’s continued appeal as a tourism destination,” said Mr Clarke.
Dublin hotels achieved average occupancy of 83 percent, with average daily rates reaching €175, representing a 23 percent increase on pre-pandemic levels.
While inbound tourism was weaker in the early part of the year, visitor numbers normalised from April onwards, supporting improved performance across the remainder of the year.
The report found outside Dublin, hotel performance in regional Ireland continued to strengthen.
It said limited new supply combined with strong domestic demand contributed to significant rate growth, with average daily rates increasing by 60% in Limerick, 51% in Galway and 38% in Cork between 2019 and 2025.
Savills said development activity remains concentrated in Dublin, where just under 1,000 new hotel bedrooms were delivered last year.
A further 1,000 bedrooms are expected to come on stream in 2026, with additional supply scheduled for 2027.
Despite this growth, occupancy levels are forecast to remain resilient at approximately 82%, supported by continued tourism demand and major international events.
Looking ahead to 2026, Savills expects transaction volumes to normalise, supported by stable economic conditions, easing cost inflation and continued brand expansion across Ireland’s main cities.
The planned reduction in the VAT rate for food-led hospitality from July 2026 is also expected to provide a modest boost to operator margins.
