The Dublin hotel market is at its most competitive level in years, according to Bord Failte. It estimates that 16 hotels are currently under construction in Dublin, with several existing ones expanding their operations. While the market looks set to get more crowded, the most notable feature of the new hotels is that few of them are likely to be five star.

Apart from some of Dublin's existing five star hotels, like the Conrad International, the Shelbourne and the Berkerley Court, few of the recent entrants, with the exception of the Alexander Hotel, have been in the five-star range.

If a planning application is successful, a new £500 million, 250-bedroom Four Seasons Hotel, in the five-star range, on a site in the Royal Dublin complex in Ballsbridge, will be under construction by the end of this year with the hotel due to open by the end of 1999.

Even though the five-star segment of the market is relatively open, the four-star segment is quite crowded and will become more so.

Expected to open soon after the Merrion is the Stakis Hotel, located in Charlemont Place, which will benefit from the aggressive marketing of the British Stakis hotels-to-casinos group. Like the Merrion, it will have banqueting and conference facilities for up to 300 people.

The competition does not look like abating in the near future according to the recent review of the construction industry by the Department of the Environment. It said "significant investment will continue, reflecting demand from both small and high-profile groups".

Existing operations like the Shelbourne have recently installed 28 new bedrooms. The rooms are part of a £3.5 million project involving the construction of a pool and a health and fitness centre. The project means that the parent company, Forte, has invested over £6 million in the Shelbourne in the past two years.

Mr John Power, spokesman for the Irish Hotels Federation said this week that there was already "a good choice of five-star hotels" and did not see any major gap in the market. "The marketing of all these new hotels is what will decide which ones are profitable and which ones are not, those that have come on stream so far have not made as much impact as we all thought," he said.