Opinion: Building, buying and rebranding: A transformative year for Northern Ireland’s hotel sector

2024 has been a landmark year for Northern Ireland’s hotel industry, marked by record- breaking hotel sales, many properties still on the market and of course rumours of further significant disposals on the horizon.

Northern Ireland remains a strong draw for investors, attracting not just local operators looking to expand but also interest from the Republic of Ireland, international investors and large funds.

The sector continues to grow, with eight hotel projects under construction and a total investment of around £100 million recorded year-to-date. However, the path has not been without obstacles. Construction has been challenging and hampered with delays. Despite one minor opening, the Foundry in 2024, no major hotel launches are expected until Spring 2025.

By then, Northern Ireland could break the elusive 10,000-room barrier, with projections suggesting this will happen in late 2025 or 2026.

Hotel acquisitions are reshaping the landscape, bringing in new brands. In Belfast, the IHG brand Voco made its debut, while a Premier Inn in Coleraine has rebranded as IBIS. In addition, a new Moxy is scheduled to open in 2025 following the acquisition of what was once the Park Inn, Belfast. As of today, Northern Ireland is home to 144 hotels comprising 9,667 rooms. Of these, 45% are branded, with an average property size of 137 rooms.

Brands hold strong appeal for investors, offering a sense of security. They bring not only loyal customers through reward points but also provide operating frameworks, compliance support and established networks. While brands have gained prominence, independent hotels have also flourished. The two often co-exist, with operators adopting a discreet brand that allows them to offer a unique, locally inspired experience.

Over the last 25 years, the number of hotel rooms in Northern Ireland has doubled, giving customers a plethora of brands to choose from.

Soaring construction costs have made acquisitions an increasingly attractive route for investors. The prolonged and often unpredictable planning process has caused many projects to stall or, in some cases, become entirely unviable.

Current estimates put the cost of building a hotel at around £200,000 per room, including the necessary common areas to meet licensing requirements. For instance, constructing a 100-bedroom hotel would require an investment of £20 million. However, if a property is available at £100,000 per room, even with significant refurbishment expenses, it can still be a far more cost-effective and manageable option for entering the market or expanding an existing portfolio.

This makes a £100,000 per-room acquisition, despite the refurbishment outlay, an appealing and controlled entry point for many investors.

A buoyant market has also drawn attention to the importance of skills. Investors are not just looking at the price tag. They are assessing the expertise of management teams, the goodwill associated with the current owners and the overall market performance. These factors help determine how well they can manage newly acquired assets and minimise operational disruptions. Investors will be looking at a return on their investment, in addition to how to increase profit levels and performance.

The management team and staff cohort may be a deciding factor in whether to progress with a sale and influence the final decision.

If the existing team can help ease the transition and maintain business momentum, the likelihood of a successful acquisition increases.

We live in interesting times in a market which is constantly evolving, shaped by customer demands and emerging consumer trends. The hotel market has experienced seismic changes over the past two decades, and with rumours of a final flurry of sales rife, 2025 is poised to be another interesting year for the hotel sector.

Janice Gault, CEO of the Northern Ireland Hotels Federation (NIHF), will host this year’s Hospitality Exchange, a two-day conference that brings together key players in the industry. Organised by NIHF, the event will take place on 15th and 16th October at the Crowne Plaza Belfast. For more information, visit here.