Elevated room rates will remain a feature in Dublin this summer amid a shortage of accommodation but the rate of price growth is expected to ease somewhat, Tom Walsh, chief executive of aparthotel operator Staycity, has said.
The group, which operates nearly 6,000 apartments across Europe under the Staycity and Wilde brands, saw its revenues more than double to €175 million last year, according to preliminary results released on Monday with earnings before deductibles reaching €30 million.
The performance was driven by a 15 per cent increase in Staycity’s achieved room rates and 10 per cent growth in revenue per available room, a key metric in the industry.
Staycity benefited from the return of corporate travel last year, Mr Walsh said, as well as a flurry of property openings over the past 18 months with the group adding 12 locations in Germany, France, Ireland and the UK.
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In spite of the cost of living crisis, Mr Walsh, a finalist in this year’s EY Entrepreneur of the Year awards, said 2023 was looking “even stronger” with demand for city breaks and from corporate travel finally reaching pre-pandemic levels.
“The macro factor is that there still seems to be a propensity among the travelling public to get out and travel and divert whatever resources they have into [the experiential economy] and getting away,” he said, adding that the expansion of Staycity’s portfolio of properties was “a specific factor” in the group’s growth last year.
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He said there was little divergence between the UK and Irish market and that “it is true to say that the Dublin market is still performing extremely well”, largely because of “a shortage of accommodation due to all the reasons we know in Dublin”.
Mr Walsh said, however, he does expect “some flattening off” of room rate growth from the 15 per cent that Staycity achieved last year. “We’re expecting some growth in rates this year but not as much as last year,” he said, with the group’s longer-term corporate accommodation business still catching up with other categories.
Asked about the controversy around elevated room rates, particularly in the capital, last summer, Mr Walsh said that Staycity monitors its metric “very closely”.
[ European investor acquires Staycity Dublin Castle Aparthotel for €11.5mOpens in new window ]
“Our value-for-money metric in Dublin is not out of line with the rest of our estate,” he said. “When our customers rank us on value for money, it’s well above 85 per cent. That’s something that’s very important. We have dimensions to our products that hotels can’t offer, which is for families, the entire family can stay in a single accommodation unit.”
He said, however: “There are occasions when the city is absolutely full, like concerts and so on, where rates can become very expensive. But on the whole, our value-for-money metrics in Dublin aren’t out of line with other European cities.”
Mr Walsh also said that Staycity, which has made a “significant investment on brand identity”, will unveil a new look later this year, splitting its Wilde and Staycity brands into separate websites. The group is also relaunching its booking engine, which he said would make it easier for customers to use the platform.
“That brand has been around for 10 years,” he said. “So, it’s probably time give it a refresh and that’s what we’re setting out to do.”
