Irish hotel investment outlook strengthens as record occupancy coincides with €1.4bn commercial property recovery
Savills data shows Dublin among Europe’s busiest hotel markets while commercial property investment records its strongest first half since 2022, reinforcing investor confidence in Ireland’s hospitality sector.
3 July 2026 | editor@irishrealestate.news
Ireland’s hotel sector is emerging as one of the strongest-performing hospitality markets in Europe, with exceptionally high occupancy rates coinciding with a recovery in commercial real estate investment activity that is strengthening the outlook for hotel and leisure investment.
New research from Savills shows Dublin hotels achieved average occupancy of 84.1% in the 12 months to April 2026, substantially ahead of the European average of 71.7%. The capital ranked among Europe’s busiest hotel markets, outperforming major gateway cities including London, Barcelona, Amsterdam, Madrid, Milan, Rome and Vienna, with only Edinburgh recording marginally higher occupancy.
The figures highlight sustained demand across Ireland’s tourism and business travel markets. Dublin hotels experienced 146 “compression nights” during the year, where occupancy exceeded 90%, representing approximately 40% of all nights. This was the highest number recorded by any major European city and indicates that hotel capacity in the capital is under sustained pressure during peak demand periods.
Savills also reported that Dublin generated average revenue per available room (RevPAR) of €148 during the period, placing it among Europe’s strongest-performing hotel markets for operating performance.
The research suggests Ireland’s hotel market is benefiting from multiple demand drivers rather than reliance on a single tourism segment. Business travel, international tourism, major concerts, sporting events and domestic leisure demand have all contributed to consistently high occupancy levels, while regional destinations are also recording growth in hotel revenues.
According to the report, RevPAR growth has also been recorded in hotels across Kilkenny, Galway, Cork, Derry and Waterford, reflecting a broader geographical spread of demand beyond the capital.
International visitors continue to underpin sector performance. US travellers account for approximately 20% of overseas visitors to Ireland but generate 41% of international tourism expenditure, supporting demand for premium accommodation, higher room rates and year-round occupancy.
Despite continued hotel development activity, Savills said Dublin has maintained some of Europe’s highest occupancy levels, indicating that additional supply has largely been absorbed by underlying market demand.
The strong operational performance comes as Ireland’s wider commercial property investment market continues to recover.
Savills Ireland reported that commercial property investment volumes reached €1.4 billion during the first six months of 2026, representing the strongest first-half performance since interest rates began rising in 2022.
Investment activity accelerated during the second quarter, with €956 million of transactions completed between April and June, an increase of approximately 150% compared with the same period last year. Quarterly investment volumes also returned to the market’s 10-year average, signalling improving investor confidence after several subdued years.
Twenty-four investment transactions completed during the second quarter, producing an average deal size of €40 million, the highest quarterly average since the second quarter of 2022.
Activity was led by the reported €485 million sale of the Horizon logistics portfolio in north Dublin by Henderson Park to a joint venture between GIC and Valor. The transaction accounted for around half of second-quarter investment volumes and is understood to be Ireland’s largest logistics property investment to date and one of the country’s ten largest commercial real estate transactions since 2012.
Savills said the investment recovery reflects growing confidence among institutional investors despite continued geopolitical uncertainty and elevated interest rates. Ireland continues to attract international capital for high-quality assets, while improving market liquidity is encouraging more buyers to re-enter the market.
The report also noted that prime office and private rented sector yields compressed by 10 basis points during the second quarter, indicating continued investor demand for premium assets.
For the hospitality sector, the combination of sustained operational performance and recovering investment markets points towards continued interest in hotel assets. Savills believes future opportunities are increasingly likely to emerge outside Dublin, where international visitors are seeking heritage, food, golf, wellness and nature-based experiences, but where the supply of high-quality accommodation has yet to match growing demand.
