Good Demand for Hospitality Venues in 2024

The 2024 property market has proved to be a good year for transactional activity for both the hotel and public house sectors with many high-profile sales. The year saw continued growth in the market following the rebuilding from the depressed landscape from the early Covid period. Post Covid, the hospitality sector has evolved with both consumers and operators adapting to market conditions and changing demands. Generally, many consumers are spending less time in hospitality settings due to rising food and beverage costs and busy work life pressures. Consumers are seeking experiences when visiting bars, hotels, and restaurants. Competition for business is intense with operators trying to reinvent their offering due to the transient nature of patrons. Property outgoings, consumables and standard inflationary pressures continue to affect the hospitality industry, particularly the food led operations. Throughout the year many well known pubs and restaurants have unfortunately ceased trading.

The landscape for the hotel market has been relatively positive, evidenced by the volume of transactional activity and trading performances, including a strong percentage increase in the RevPAR (Revenue Per Available Room) from the preceding trading year with occupancy levels back to pre-pandemic levels. The quality of the hotel stock continues to improve with most hotels at 3 Star and above. 40 percent of the hotel offering is now 4 Star. The growth of new operators and international brands has aided the market whilst improving access to a worldwide consumer base.

This market has seen a lot of activity in terms of sales and acquisitions over the 12 months with well over £50 million generated from these sales. The larger transactions included the acquisition of the 145 bed Park Inn Belfast by the Dublin based MHL Hotel Collection, who intend to rebrand the city centre venue as a Moxy in early 2025. AJ Partners have added a second Portrush hotel to their portfolio by acquiring the Atlantic Hotel. In addition, we have seen further expansion of several local hotel operators. The Galgorm Collection has recently spent £28 million acquiring the Roe Park in Limavady and Galgorm Castle Estate in Ballymena complementing their existing portfolio and providing golf to their comprehensive offerings. Other transactions include Andras House, who acquired a hotel investment on the Dublin Road for more than £7 million, whilst also acquiring a neighbouring brownfield site at Botanic for future hotel development. The McKeever Group and the Simpson brothers also expanded by acquiring trading hotels in the Northwest, in Coleraine and Derry, respectively. In terms of new hotel developments, The Foundry Hotel opened in the Cathedral Quarter whilst several new hotels will open in 2025 to include the 5 Star Dunluce Lodge and The Marcus also in Portrush, another development by Andras House.

The pub market experienced reasonable activity with several high-profile sales, particularly in the Belfast City Centre, including the acquisition of Kellys Cellars by the Downey Group, which further adds to their existing Belfast and Derry outlets. In addition, The Clover Group acquired the freehold interest of White’s Tavern. We sold McKenna’s in the Docks, which has recently been rebranded as Seaton’s, a second venue for the owner of Ben Madigan’s bar. Provincially, the market continues to be less attractive than the high-density city areas. Mid-week trading is generally poor with peak times restricted to weekends. Operators have had to adapt to off peak times by closing at the start of the week or late opening to reduce outgoings and maintain viability. These issues are not specific to the rural hospitality market. Provincially, transactional activity has been sporadic with retirement deals including The Front Page which we sold in Ballymena; The Cottonmount Arms in Mallusk and Hagan’s in Dungannon. We would estimate the total value of pub transactions at more than £15 million for 2024.

Moving into 2025, we are again hopeful of an encouraging outlook for the transactional activity in the hospitality sector, however, there will undoubtedly be continued financial challenges for operators to deal with to include rates, VAT, employee and inflation costs.

Published in LCN Magazine January 2025.