Investing in Belfast’s Future: A Real Estate Research Report

Bouncing back stronger

The NI hotel market has had phenomenal market growth over the last five years with 5.3 million trips to Northern Ireland in 2019. NI hoteliers are very resilient and have experienced challenging times in the past. We expect hoteliers to bounce back again towards the second half of the year.

Paul Collins
CBRE Head of Hotels Ireland

Hotel market

The current pipeline is limited for hotel development. However, there are three aparthotel schemes with planning permission. These include:

• room2 Belfast aparthotel (175 units)
• Bedford Yard (154 units) and
• Dublin Road aparthotel (85 units).

The existing Belfast aparthotel market is limited and the most recent to open was Dreams Pods (19 units) in Bank Square.

Occupancy rates, RevPAR and ADR

Prior to 2020, Belfast was approaching 72 per cent occupancy rate, up 5 per cent from 2014’s figure. RevPAR was sitting at £57.25 and the average daily rate reached £78.20, well above the regional average.  

Investment

Transactions since 2015 have included:

• the sale of the Hilton Belfast (part of a wider portfolio sale known as Project Dragonglass) in 2018
• the sale of Project Trident (the Tifco Hotel Platform which included the Travelodges in Belfast and Derry) to Apollo Global Management
• Jury’s Inn Belfast (part of portfolio sale) purchased by Pandox in 2017

In 2015, Dalata Hotel Group purchased the former Holiday Inn for £18.5million.  In the same year, Ampleforth Group purchased the five-star Fitzwilliam Hotel.

Hotel market looking forward

It is anticipated that with the lifting of restrictions and hotels reopening, Northern Ireland and Belfast will be a popular staycation destination since international travel will be limited in the short term. Our hunger to travel and take holidays is still evident, with Tourism NI forecasting a return to 80 per cent of 2019 levels by the end of 2022 with a fuller recovery by 2024. Results from a recent Tourism NI survey found that around half of holidaymakers expect to take a short break or holiday in Northern Ireland by the end of 2021. The effectiveness of the vaccine rollout in Northern Ireland will also be key to the hotel market’s recovery. Additional growth in the sector will be driven by the Belfast Region City Deal which will be investing significantly in creating further world-class tourist attractions. An example of this is the newly proposed £100million Belfast Destination Hub in the city centre, a unique international attraction exploring the many stories of the city and its people.

This will be a major, multi-venue cultural centrepiece where local people meet and Belfast connects with its international visitors. It will include a large-scale exhibition space with cafés, restaurants and retail outlets appropriate to the nature and content of the attraction. It will be of landmark architectural quality, with attractive covered outdoor areas.

Northern Ireland Tourism Statistics for 2019