Dublin Economic Monitor - Issue 39 | December 2024

ISSUE 39

DECEMBER 2024

in this issue LATEST DUBLIN ECONOMIC DATA S&P GLOBAL DUBLIN PMI MASTERCARD SPENDINGPULSE ELECTIONS WITH ECONOMIC CONSEQUENCES

WELCOME

Highlights Employment levels in Dublin reached a new peak of 829,400 (SA) residents employed in Q3 2024, as the county’s unemployment rate recorded a marginal increase to stand at 4.7% (SA).

Welcome to the December 2024 issue of the Dublin Economic Monitor

Growth in retail spending in the Dublin economy slowed in Q3 2024, increasing by 0.3% QoQ, likely tempered somewhat by cost of living issues and relatively high interest rates.

The Dublin Economic Monitor is a joint initiative on behalf of the four Dublin Local Authorities, and is designed to be of interest to those living and doing business in Dublin or considering locating here. The report is produced by Grant Thornton with inputs from S&P Global and MasterCard.

There are two special feature articles this quarter, both of which centre on the hospitality sector.

The first is from Ray O’Donoghue, the new Night-Time Economy Advisor for Dublin City, and concentrates on the city’s nighttime economy and its vision to foster a more dynamic, inclusive, and vibrant nightlife. The second article, by Anne Walsh, Head of Accommodation Development at Fáilte Ireland, focuses on the recent supply and demand for accommodation and prospects for future development.

Housing completions across Dublin reached a new peak of 3,900 units (SA) in Q3, following a 71.6% QoQ increase.

Business activity in the Capital continued to increase in Q3, as the manufacturing, construction and services sectors’ Purchasing Managers’ Indices all recorded growth for the first time since Q2 2022.

Passenger journeys on Dublin’s public transport network declined by 2.2% QoQ to 69.1 million trips (SA), following the Q2 peak of 70.7 million journeys (SA).

Dublin's hotel market remained resolute through the late summer and early autumn period, as occupancy rates reached a new peak rate of 93.6% in September.

Dublin City Council

South Dublin County Council

The Monitor is divided into the following themes for Dublin: Economy Business Developments Retail Hospitality Labour Market International Rankings Housing Transport & Travel For more data and insights see: www.dublineconomy.ie The next edition will be published in March 2025. www.dublineconomy.ie @DCCEconDev

Fingal County Council

Dún Laoghaire Rathdown County Council

This document provides general information on the Dublin economy. It is not intended to be used as a basis for any particular course of action or as a substitute for financial advice. The document is produced independently by Grant Thornton and Pearl and Dean Ireland; the views and opinions expressed are those of the relevant author, and do not necessarily reflect the views of the Dublin Local Authorities. The Dublin Local Authorities disclaim all liability in connection with any action that may be taken in reliance of this document, and for any error, deficiency, flaw or omission contained in it.

2 //

ECONOMY

Elections with economic consequences larger economies compared to projections made earlier in the year. Embedded headwinds such as aging populations and weak productivity are holding back growth potential. Euro area growth is forecast at 0.8% in for 2024 and 1.2% in 2025. Encouragingly, with recent inflation woes largely off the agenda, the European Central Bank has been able to cut interest rates in an effort to shore up growth. The ECB lowered its deposit rate by 25 basis points in October, to 3.5%, following up on a similar cut in June. Where rates go next will be data-dependent and ECB President Christine Lagarde is at pains to point out that there is no pre-commitment to a particular path.

The Irish economy continues to perform well. In fact, the latest quarterly bulletin from Central Bank (Q3 2024) suggests that Gross National Income grew by 5% in real terms in 2023. This pace of expansion, paired with continued strength in the labour market suggests that the economy is motoring along beyond capacity, something the Irish Fiscal Advisory Council were keen for the government to acknowledge through some prudence in the recent, potentially inflationary, budget. With government spending stimulating demand, Modified Domestic Demand (a proxy for the domestic economy) is forecast to grow at an annual average rate of 2.6 per cent per annum from 2024-26.

The incoming government will be glad of this, and will be buoyed by the continued strength of the labour market, and the recovery in key exporting sectors such as pharma. Whoever forms the government will be greeted by a favourable economic outlook but one that will take considerable effort to maintain Ireland’s competitiveness and attractiveness to inward investment.

Modified Domestic Demand Forecast 3.5% 3.0% Annual Percentage

“The economy, stupid” is a well-worn phrase from the Clinton era that gets dusted down at election time. Since the last Dublin Economic Monitor in September, we now know that Donald Trump is President elect in the US and Ireland’s general election has just taken place.

At the time of writing, the results of the Irish election are not known but it is clear that in both the US and here, the economy has featured large in pitches to the electorate.

Donald Trump’s victory owes a lot to a promise to end inflation and enact tariffs of 60% on goods from China and tariffs of at least 10% on all imports into the US. He also pledged to incentivise industries to bring production back to the United States, and to reduce the corporate tax rate to 15%. This has led to inevitable questions about the risk to the Irish economy.

Mostly US-owned foreign multinationals employ about 11% of Irish workers and the funding of public services is hugely reliant on the corporate tax they pay.

Just three big US companies account for about one in every eight euros of total tax collected in Ireland and the Irish Fiscal Advisory Council suggest that 43% of all corporate tax receipts are collected from US companies.

Undoubtedly, Ireland is exposed here, as it was before a Trump Presidency. Whether or not US policies actually come to pass that then lead to a flow of activity from Ireland back to the US remains to be seen. There is no certainty that a Trump Presidency will be any more protective or ‘America first’ than the US has been in the last decade. So, while time will tell how things pan out, there are some certainties from which the economy can take comfort – businesses tend to make decisions with a longer term view than election cycles, and Ireland continues to be a compelling location choice for investors thanks to our EU market access, our talent and our tax.

That said, Ireland is not without competitiveness challenges, challenges which have been playing out very publicly during the election campaign. Addressing issues such as housing, infrastructure, planning, and the funding of higher education are crucial pieces of the jigsaw for Ireland to remain competitive. Making headway on these issues will occupy the new government and will require significant spending. So, what sort of economic performance can the incoming government expect to operate in as it grapples with delivering on promises made?

Global growth, according to the October 2024 IMF World Economic Outlook, is expected to remain stable yet underwhelming. At 3.2 percent in 2024 and 2025, upgrades to the forecast for the US are offset by a downward revision to forecasts for some of Europe’s

2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 2023

2024

2025

2026

SOURCE: CENTRAL BANK OF IRELAND.

// 3

Business Developments

Dublin Labour and Office Markets Receive Boosts

The report concluded that “an increasingly digitalised world will lead to a broader mix of buildings within the

4 //

Commercial Property Developments The Dublin office market, which has experienced upheaval in recent years, has had some notable developments in H2 2024. Software company, Workday, is to lease 475,000 sq ft of office space at College Square in Dublin 2 in what is, according to the Irish Times, “the largest single office letting to have taken place in the European office market since the onset of the Covid-19 pandemic in early 2020”. Professional services firm, Deloitte, has signed a lease for a new headquarters in Dublin 2. It is understood that the property on Adelaide Road, which is currently under construction, will offer about 160,000sq ft of space and over 1,400 desks. These deals follow other significant leases executed this year by BNY, Addleshaw Goddard, and EY. Despite such developments, vacancy rates – shown in the chart – remain at high levels in the Capital.

DUBLIN OFFICE SPACE VACANCY RATES % 20% 18% 16% 14% 12% 10% 8% 6% 4% 2%

Dublin Suburbs SOURCE: CBRE.

Dublin 2/4

Q3 24

Q1 24

Q3 23

Q1 23

Q3 22

Q1 22

Q3 21

Q1 21

Q3 20

Q1 20

Q3 19

Q1 19

Q3 18

Q1 18

Q3 17

Q1 17

Q3 16

Q1 16

0% Q3 15

• Offices: companies are reporting a 50% office attendance rate on average across the working week; this is down from 65-70% prior to the pandemic.

On Mondays, office attendance was just 35%, while on Fridays it was 29%. The peak day for attendance was Wednesday at 61%.

• Retail & Hospitality: Nearly 50% of retailers reported that footfall has been lower by 21–40% in city centre stores since the pandemic. Almost half of respondents selected Friday as the day on which they had seen the most notable decline. In city centre pubs, Friday lunchtime trade (previously the busiest lunch day of the week) is trending 20% lower than on Thursdays, post-pandemic.

confines of the city over the next 10 to 15 years”.

Q1 15

Remote Working Trends Dublin City Council has recently completed a research report on the implications of remote working trends on economic activity in the city. The report, which was compiled by CBRE Research and will help inform a strategy on vacancy and dereliction for the city centre, assessed current and future trends in offices, retail, hospitality, and the future of real estate. Key lessons included:

In city centre pubs, Friday lunchtime trade (previously the busiest lunch day of the week) is trending 20% lower than on Thursdays, post-pandemic.

Q3 14

Jobs Boosts for Dublin The Dublin labour market has maintained momentum in recent quarters, as signified by its low unemployment rate. Recent developments in the market will contribute further to this upswing, most notably Microsoft’s announcement of its creation of 550 new jobs in the Capital over the next 3-4 years. The new engineering and research and development jobs will be focused on developing artificial intelligence (AI) and cybersecurity products and services. While the roles will be added over the course of three to four years, 120 are open for applications from November. Turner & Townsend (construction services), SiriusXM (audio entertainment), Chargebee (Revenue Growth Management platform) and CalypsoAI (cybersecurity) are just some other firms which have recently announced plans to establish or expand their workforces in the Capital.

Business Developments

All Sectors Contribute to Solid Expansion in Dublin Business Activity in Q3 2024 Overall Dublin S&P Global PMI (SA) 70

sa, 50 = no change

Increasing rate of growth

60

50

40

30

Rest of Ireland

Q3 24

Q3 23

Q3 22

Q3 21

Q3 20

Q3 19

Q3 18

Q3 17

Q3 16

Q3 15

Q3 14

Q3 13

Q3 12

Q3 11

Q3 10

Q3 09

Q3 08

Q3 07

Q3 06

Q3 05

Increasing rate of contraction Q3 04

20

Dublin

Overall PMI New Orders (SA) 70

sa, 50 = no change

Increasing rate of growth

60

50

40

30

Rest of Ireland

Q3 24

Q3 23

Q3 22

Q3 21

Q3 20

Q3 19

Q3 18

Q3 17

Q3 16

Q3 15

Q3 14

Q3 13

Q3 12

Q3 11

Q3 10

Q3 09

Q3 08

Q3 07

Q3 06

Q3 05

Increasing rate of contraction Q3 04

20

Dublin

Overall PMI Employment (SA) 70

sa, 50 = no change

Increasing rate of growth

60

50

40

30

Rest of Ireland

Dublin

Q3 24

Q3 23

Q3 22

Q3 21

Q3 20

Q3 19

Q3 18

Q3 17

Q3 16

Q3 15

Q3 14

Q3 13

Q3 12

Q3 11

Q3 10

Q3 09

Q3 08

Q3 07

Q3 06

Q3 05

Increasing rate of contraction Q3 04

20

The Dublin private sector continued to tick along nicely during the third quarter, as was the case across the broader Irish economy.

The most pleasing aspect of the latest set of results was a renewed rise in manufacturing production, meaning that all of the segments covered by the PMI surveys contributed to the overall expansion for the first time in more than two years The Dublin Purchasing Managers’ Index (PMI) showed that business activity in the Capital’s private sector continued to increase during the third quarter of the year. The expansion was slightly stronger than that seen in the previous quarter with the headline rate increasing to 52.8, up from 52.4 in Q2, and above the 50 mark which denotes growth. It was, however, down from the 53.5 reading recorded in the same quarter in 2023.

On a sectoral basis, there was a renewed expansion in manufacturing, with a PMI reading of 53.7. This positive outturn compared favourably to the contraction recorded in Q2 (46.5), and was only the second quarter in the past two years in which activity expanded in the sector.

The construction sector also saw accelerated growth with an index reading of 53.2, up from 51.9 in Q2. This may be related to the increasing volume of units being added to Dublin’s housing stock. These expansions, combined with continued, albeit slower, growth in the Services sector (51.5), meant that all three monitored sectors recorded growth for the first time since Q2 2022. This rise in activity in Dublin was broadly in line with that seen across the Rest of Ireland.

Growth in new orders amongst Dublin businesses quickened to a one-year high of 53.4 in Q3 2024, reflecting a third successive quarter of expansion.

In response to the increase in activity, the rate of job creation in Dublin rose to 54.1 in Q3, up from the previous quarter’s reading of 50.8. This was the highest reading in a year, and the continued growth means that employment in Dublin has expanded in every quarter since Q4 2020.

// 5

RETAIL

Dublin retail spending shows slowing momentum in Q3 2024 MasterCard Total Retail Sales Index (SA)

145

155

+1.1% YoY

150 145 140 135

142

130

+0.9% YoY

125 120 115 110 105

Dublin

Q3 24

Q2 24

Q1 24

Q4 23

Q3 23

Q2 23

Q1 23

Q4 22

Q3 22

Q2 22

Q1 22

Q4 21

Q3 21

Q2 21

Q1 21

Q4 20

Q3 20

Q2 20

Q1 20

Q4 19

Q3 19

Q2 19

Q1 19

Q4 18

Q3 18

Q2 18

Q1 18

Q4 17

95

Q3 17

100

Ireland

quarter. Discretionary and Household Goods sales were flat.

Growth in spending via eCommerce platforms stood at 0.8% QoQ. While this represented a modest acceleration from the preceding quarter, it remained below longer term growth rates.

Overall, Q3 depicts a slowing of momentum in the Capital’s retail sector from what was an exceptional postpandemic recovery.

At the national level, retail spending continued to rise YoY (+0.9%) and was stable QoQ (0%).

Retail spending by consumers in Dublin continued to grow in Q3 2024, albeit at more subdued rates.

Total expenditure in the Capital in the quarter rose by 0.3% QoQ and by 1.1% YoY – thus elevating the retail spending index to a new peak of 144.8 (100 = Q2 2015). This signifies ongoing consumer confidence and willingness to spend, tempered somewhat by cost of living issues and interest rates which are at relatively high levels compared to recent years.

The QoQ growth in Q3 was broadly aligned with the rates of expansion recorded over the previous year.

Spending growth in Q3 was subdued in the four major categories of the retail sector which are tracked.

Entertainment (+0.3%) and Necessities (+0.2%) were the only categories in which expenditure rose in the Dublin Retail Sales Value Index (SA) Q3 2024

+2.6%

+0.3%

+0.3%

+5.7%

+1.2%

Necessities

Discretionary

Household Goods

Entertainment

eCommerce

YoY

YoY

YoY

YoY

YoY

METHODOLOGY A macro-economic indicator, SpendingPulse™ reports on national and Dublin retail sales and is based on aggregate sales activity in the MasterCard payments network, coupled with estimates for all other payment forms, including cash and cheque. This information has been grossed up to present an estimate of the total retail sales of retail businesses in Ireland and Dublin to both residents and tourists. Data is seasonally adjusted but is not adjusted for inflation. MasterCard SpendingPulse™ does not represent MasterCard financial performance. SpendingPulse™ is provided by MasterCard Advisors, the professional services arm of MasterCard International Incorporated. See www.dublineconomy.ie for more info on methodology. *ALL VALUES ARE SEASONALLY ADJUSTED BY GRANT THORNTON, AND HAVE BEEN RE-ADJUSTES SINCE THE LAST ISSUE. THE DATA IN THIS ISSUE IS HENCE NOT DIRECTLY COMPARABLE TO PREVIOUS ISSUES.

6 //

RETAIL

Tourism contributes positively to Q3 spending growth Dublin and Ireland Tourist Spend by Origin - Q3 2024 (SA) Overall

+0.6%

+4.1%

QoQ OVERALL CHANGE IN TOURSIM SPEND IN IRELAND

QoQ OVERALL CHANGE IN TOURSIM SPEND IN DUBLIN

+1.3%

+11.2%

+0.3%

+15.2% QoQ CHANGE IN SPENDING IN IRELAND

QoQ CHANGE IN SPENDING IN DUBLIN

-1.5%

-1.0%

-18.6%

-22.9%

+3.7%

+3.6%

QoQ CHANGE IN SPENDING IN IRELAND

QoQ CHANGE IN SPENDING IN DUBLIN

QoQ CHANGE IN SPENDING IN IRELAND

QoQ CHANGE IN SPENDING IN IRELAND

Ireland

QoQ CHANGE IN SPENDING IN DUBLIN

QoQ CHANGE IN SPENDING IN DUBLIN

QoQ CHANGE IN SPENDING IN IRELAND

QoQ CHANGE IN SPENDING IN DUBLIN

Dublin

SOURCE: MASTERCARD SPENDINGPULSE

The international tourist market was a driver of retail spending growth in Dublin in Q3 2024. Expenditure by visitors to the Capital rose by 1.3% QoQ and 3.3% YoY, providing a timely fillip for the tourism sector and economy more generally in what is a somewhat challenging operating environment.

The US market, so crucial to Irish tourism, was once again a strong contributor towards QoQ growth. An expansion of 4.1% in spending by US tourists was the largest proportional increase amongst the source markets covered in the SpendingPulse. While robust, the increase was notably short of the growth rate of 15.2% nationally.

This underlines a dichotomy between Dublin and the Expected Budget '25 Impact on Living Standards of Consumers 4%

42%

Will significantly improve your living standards Will slightly improve your living standards Will not improve your living standards

47%

7% Impact SOURCE: ECB on living standards SOURCE: ILCU & CORE RESEARCH.

Don't know/unsure

rest of the country in this crucial tourism segment.

While only representing a small portion of total retail expenditure, Chinese tourist spending expanded by similar rates in Dublin (+3.6%) and nationally (+3.7%) in the quarter. The UK (+0.3%) and German (-1%) markets, which are especially vital for weekend breaks to the Irish Capital, recorded broadly stable spending patterns in the quarter.

The French market was an outlier in Q3 with significant QoQ contractions in spending of 22.9% and 18.6% in Dublin and nationally respectively. This may be a reflection of the relatively subdued performance of the French economy in 2024 to-date, and the impact of the Paris Olympics on numbers travelling outside the country in the quarter.

Budget Impact In early October, the Government revealed its final Budget before the General Election. An overall package of €10.5 billion was announced, heavily weighted towards expenditure – including €2 billion in once-off measures.

Despite such a generous Budget package, consumer sentiment on the Government’s interventions appear mixed. According to the Irish League of Credit Unions (ILCU), and as shown in the chart, 47% of consumers surveyed since the Budget felt that the package would not improve their living standards. This highlights the acute cost of living pressures which remain in the Irish economy – and which will be expected to continue to influence retail spending over the coming quarters.

// 7

HOSPITALITY

Hotel occupancy rates climb to new peak in September Dublin Hotel Supply & Occupancy Rates

93.6% Max

100%

140

90%

120

80% 100

70% 60%

80

50% 60

40% 30%

40

20% 20

10%

Occupancy (%)

Oct 24

Aug 24

Jun 24

Apr 24

Feb 24

Dec 23

Oct 23

Aug 23

Jun 23

Apr 23

Feb 23

Dec 22

0

Oct 22

0%

Index of Supply

SOURCE: STR GLOBAL.

HOTEL OCCUPANCY RATE YEAR ON YEAR CHANGE % POINTS

OCT '24 88.3% +1.8

INDEX OF HOTEL ROOM SUPPLY (DEC 2014=100) YEAR ON YEAR CHANGE % POINTS

136.2 +5.5

The Dublin hotel market remained resolute through late summer and early autumn 2024. Hotel occupancy rates increased by 4.7 percentage points (pp) MoM to stand at 91.7% in August, and rose by a further 2pp to reach a new peak rate of 93.6% in September. A 5.4pp MoM decline was subsequently recorded in October, but occupancy remained 1.8pp above the October 2023 equivalent. Strong demand for hotel rooms was likely driven by end of summer tourism and big ticket events including the College Football Classic and performances

by Coldplay. In August, average daily rates stood at €204, thus exceeding €200 for the third time in 2024, before falling back to €169 in October. The supply of hotel rooms also remained robust through to October.

A peak supply index reading of 136.2 was recorded in both August and October, representing YoY growth of in excess of 5%.

Restaurant bookings fluctuate in the lead up to Christmas Seated Diners at Dublin Restaurants (% Change Relative to 2019)

PERCENTAGE CHANGE IN SEATED DINERS VERSUS 2019 BASELINE - DUBLIN

225%

PERCENTAGE CHANGE IN SEATED DINERS VERSUS 2019 BASELINE - IRELAND

190%

200%

Max

175%

NOV '24 +61.6 +102.2

150% 125% 100% 75% 50% 25% 0% -25% -50%

SOURCE: OPENTABLE. NOTES: DATA ONLY INCLUDES SATURDAY DINERS. SINCE MARCH 2023, THE SOURCE DATA IS PRESENTED RELATIVE TO ONE YEAR BEFORE. GRANT THORNTON HAVE ADJUSTED THIS DATA TO MAINTAIN THE 2019 BASELINE.

8 //

Nov 24

Aug 24

Jun 24

Mar 24

Dec 23

Oct 23

Jul 23

May 23

Feb 23

Dec 22

Sep 22

Jul 22

Apr 22

Jan 22

Nov 21

-75% -100%

The volume of seated diners at restaurants in Dublin stood 62% above the 2019 baseline on the third Saturday of November 2024. This followed several spikes in September and October. Most recently, the October bank holiday proved fruitful for the industry, with volumes rising 113% above the 2019 baseline.

This will provide hope for a strong Christmas period, in spite of current challenges in the industry. Nationally, the performance of the sector has been stronger in 2024, with the number of diners frequently rising twofold versus 2019. The Restaurant Association of Ireland recently launched a policy document, aimed at addressing the challenges facing the hospitality industry which includes a decoupling of the VAT rate between food and accommodation.

SPECIAL REPORT

A new era for Dublin's night-time economy Ray O’Donoghue

Night-Time Economy Advisor for Dublin City.

Looking ahead, we have exciting initiatives on the horizon, such as a potential Electronic Music and Arts Festival and a World Food Trail in 2025

Working together with Dublin City Council, the Department of Culture, and key city stakeholders, we’re igniting innovative and inclusive nightlife initiatives across the city, merging culture, safety, and public engagement. until 2:30 am in seven venues, showcasing our efforts to expand Dublin’s nightlife offerings. We also piloted As Dublin's Night-Time Economy (NTE) Advisor, I’m a Late-Night Welfare Area, providing essential support thrilled to share the progress we’re making to transform services; this will become semi-permanent by the end of the city’s nightlife into a vibrant, safe, and welcoming 2024 to add a further layer of safety to our nightlife. experience. Within three months of my appointment, we Under our guidance and support, diverse events like launched Dublin’s Night-Time Economy Committee, Summer Nights, a multicultural series with music, food, a collaboration of over 30 stakeholders, including and alcohol-free options, have flourished. Programs like the Vintners’ Association, An Garda Síochána, the the Dublin Book Festival – After Dark Series, Comedy Restaurant Association of Ireland, and Dublin City Culture in the Capital, and various film screenings Council. Together, we’re committed to creating a night- celebrate local voices and reflect our goal of a vibrant, time economy that reflects Dublin’s reputation as a culturally rich nightlife. world-class city.

A crucial focus of our work is balancing nightlife with In our inaugural meeting on July 2, 2024, we community needs. I’ve engaged closely with publicans, established a structured strategy to drive Dublin’s residents, and venues in neighbourhoods like Camden night-time economy. With a Steering Group for policy Street to address noise and behaviour concerns, ensuring direction and an Advisory Group focused on actionable, our night-time activities respect both community and creative solutions, we’ve laid the groundwork for a commercial interests. sustainable, thriving night-time economy.

Looking ahead, we have exciting initiatives on the The recently launched Dublin Night-Time Economy horizon, such as a potential Electronic Music and Arts Strategy has garnered significant media and public Festival and a World Food Trail in 2025, along with support. Built with input from “Your Dublin, Your already established campaigns like the NTA Late-Night Voice” surveys, the strategy highlights our commitment Transport Campaign and Safe and Sound anti-social to inclusive, community-driven nightlife. It aligns behaviour initiative. with national programs like Creative Ireland and the It’s an honour to be part of Dublin’s transformation Arts Council and reflects our dedication to engaging into a dynamic, inclusive night-time destination, and I stakeholders from across the city. look forward to sharing more updates in future editions This year’s Nocturnal Beats at Culture Night Late— of the Dublin Economic Monitor. ranked a top-10 event in The Irish Times out of 1,700 nationwide—extended cultural events, for the first time,

// 9

LABOUR MARKET

Dublin’s unemployment rate rises marginally in Q3 DUBLIN & NATIONAL UNEMPLOYMENT RATE % (SA)

DUBLIN UNEMPLOYMENT RATE (SA) YEAR ON YEAR CHANGE % POINTS DUBLIN EMPLOYMENT '000S (SA) YEAR ON YEAR CHANGE '000S (SA)

14%

11.7%

12%

Max

10% 8%

10.3%

6%

Max

4%

Q1 24

Q3 24

Q1 23

Q3 23

Q1 22

Q3 22

Q1 21

Q3 21

Q1 20

Dublin

Q3 20

Q1 19

Q3 19

Q1 18

Q3 18

Q1 17

Q3 17

Q1 16

Q3 16

Q1 15

Q3 15

0%

Q3 14

2%

Q3 '24 4.7% -0.02 829.6 +41.5

Dublin’s unemployment rate ticked upwards in Q3 2024, marking the first such increase of the year. The unemployment rate in the Capital rose by a marginal proportion of 0.2 percentage points (pp) QoQ to reach 4.7% (SA) in the quarter, but remained stable YoY. The rate equated to 41,300 unemployed residents (SA) of the Capital. In spite of a relative softening in demand for workers, the labour market remains in broadly rude health. Nationally, the unemployment rate declined by 0.1pp to 4.3% (SA) and also remains close to ‘full employment’.

National

SOURCE: CSO. DUBLIN SEASONALLY ADJUSTED BY GRANT THORNTON NOTE: WHOLE DATASET READJUSTED SINCE LAST ISSUE

Employment levels continue to gain momentum Employment by Broad Sector '000s (SA) 900

SERVICES EMPLOYMENT '000S (SA) YEAR ON YEAR CHANGE '000S (SA) INDUSTRY & CONSTR. EMPLOYMENT '000S (SA) YEAR ON YEAR CHANGE '000S (SA)

829,400 Max

675

450

Construction

Industry

Public Sector

Private Services

SOURCE: CSO. SEASONALLY ADJUSTED BY GRANT THORNTON. INDIVIDUAL SECTOR VALUES MAY NOT SUM TO TOTAL DUE TO ROUNDING.

10 //

Q3 24

Q3 23

Q3 22

Q3 21

Q3 20

Q3 19

Q3 18

Q3 17

Q3 16

Q3 15

0

Q3 14

225

Q3 '24 726.6 +33.0 102.8 +9.6

Employment levels across the Dublin economy continued to climb to reach a new peak in Q3 2024.

Total employment amongst the Capital’s residents stood at over 829,000 (SA) in the quarter, up by 0.3% QoQ (+2,800 jobs) and 5.4% YoY (+42,600 jobs). The construction sector was the main driver of growth as employment increased by 17.6% QoQ or an additional 5,900 jobs to stand at 39,400. The Construction Industry Federation has noted recent increases from new orders across general contracting, home building and specialist contracting - each of which may be driving employment growth. The private sector also recorded QoQ growth (+1.1%), employing almost 510,000 residents in Q3. In contrast, both public sector and industry employment declined QoQ, falling by 3.2% and 2% respectively.

LABOUR MARKET

Dublin job postings increase in November 2024 Job Postings on Indeed (Feb 2020 = 100)

PERCENTAGE POINT CHANGE VERSUS FEB 2020 DUBLIN PERCENTAGE POINT CHANGE VERSUS FEB 2020 IRELAND

240 220 200 180 160 140 120 100 80

86.0

60

Min

Nov 22 Dec 22 Dec 22 Jan 23 Mar 23 Mar 23 Apr 23 May 23 Jun 23 Jul 23 Aug 23 Sep 23 Oct 23 Nov 23 Dec 23 Jan 24 Feb 24 Mar 24 Apr 24 May 24 Jun 24 Jul 24 Aug 24 Sep 24 Oct 24 Nov 24

40

NOV '24

Ireland

Dublin

SOURCE: INDEED, SEASONALLY ADJUSTED DATA. NOTE: 7 DAY MOVING AVERAGE, INDEXED TO 01/02/2020. METHODOLOGY CHANGE AND WHOLE DATASET RE-ADJUSTED SINCE LAST ISSUE. IRELAND IS ONE OF SEVERAL COUNTRIES WHERE JOB POSTINGS DATA HAS BEEN RESTATED AS A RESULT OF A METHODOLOGY CHANGE. THIS APPLIES AT THE NATIONAL LEVEL AND ALSO AFFECTS THE REGIONAL DATA

-9.4 +15.6

Dublin job postings on the Indeed website in November 2024 remained below the February 2020 baseline (-9.4 percentage points) but gradually increased throughout the month. Job postings in the Capital have remained below the baseline since April 2024 and had been on a gradual descent before an uptick in postings in September and November. These increases may be driven by the expansions in business activity recorded in Dublin’s Q3 Purchasing Managers’ Index (PMI, see page 5), which recorded growth in employment and across each of the manufacturing, construction, and services sectors. Job postings across Ireland have followed a similar trend but remain above the baseline (+15.6 percentage points) as hiring demand remains strong.

FDI into Dublin declines in Q3 2024 4 QUARTER ROLLING AVERAGE Q3'24

FDI Capital Investment per Capita & Jobs Created, Rolling 4 Quarters, Q3 2024

NO. OF PROJECTS (SA)

AVG. PROJECT VALUE (MILLION, SA)

LONDON

81

15

PARIS

28

20

MADRID

27

20

DUBLIN

26

32

AMSTERDAM

13

11

12

10

$800

4000

$700

3500

$600

3000

LISBON

$500

2500

$400

2000

$300

1500

$200

1000

$100

500

Based on a rolling 4 quarter average, foreign direct investment (FDI) into Dublin declined in Q3 2024, following exceptional Q2 growth. Average capital investment over the 4 quarters decreased by 1.9% QoQ and 9.6% YoY to $831 million. Investment in absolute terms in Q3 fell to $282 million, having reached over $1,400 million in the previous quarter. The number of FDI projects and jobs created also declined by 1.9% and 8.6% QoQ respectively based on a rolling 4 quarter average. In absolute terms, all European cities analysed, with the exception of Madrid, recorded a QoQ decline in capital investment in Q3, as economic growth slowed across the region. In spite of this, Dublin compared favourably for both FDI per capita ($732.18) and average project value ($32 million) based on a rolling 4 quarter average.

$0

Dublin

London

Lisbon

Madrid

Paris

Capital Investment per Capita (left axis) Jobs Created (right axis) SOURCE: FDI MARKETS.

Amsterdam

0

// 11

DUBLIN'S INTERNATIONAL RANKINGS

Dublin Ranked as a Top Global Financial Centre Internationally published benchmarks are a useful means of measuring a city’s performance relative to its peers, and recent indicators for Dublin confirm the city’s strong showing across a range of dimensions (see table opposite).

A Global Financial Centre The capital has been ranked inside the top 15 most significant financial centres in the world. The Global Financial Centres Index (GFCI) placed Dublin in 14th position in 2024, up 11 places on 2023. This significant improvement was founded on Dublin’s showing on metrics including investment management (7th), reputation (10th), professional services (13th) and human capital (14th). The global ranking corresponded to a position of 4th in Western Europe – behind only London, Frankfurt and Geneva. The GFCI defined Dublin as a ‘broad and deep’ financial centre which is characterised by a combination of diversification and specialisation.

Labour Market Momentum Dublin’s labour market has recorded the strongest upswing in hiring in 2024 across 50 metropolitan areas globally. This is according to LinkedIn which has developed a ‘Hiring Rate’ metric which compares cities across the world. Dublin was the only Eurozone metropolitan area with positive hiring momentum, and also notably ranked second for the share of hybrid and remote job opportunities available. LinkedIn Ireland Country Manager, Sue Duke, said of the results: "With the Irish economy effectively at full employment, it is no surprise that we are seeing a lot of competition for roles in a tight jobs market. What clearly stands out is that

12 //

companies that offer flexible work options are attracting more applicants than their peers, so it continues to be a point of differentiation for prospective employers”.

A Walkable City The Capital’s reputation as a ‘walkable’ city has been reinforced by its rating as one of the most accessible in terms of availability of essential services within 15 minutes’ walk. Over 95% of people live within a 15-minute walk of essential services such as healthcare and education, according to research by Sony Computer Science Laboratories. The report found that the most accessible locations were midsize European cities including Zurich, Milan, Copenhagen and Dublin.

Remote Working Costs Dublin has been ranked as the second most expensive city in Europe in which to live and work remotely. This is according to the neo-bank, Bunq, which placed the Capital behind only London in an analysis of a range of cost metrics. Dublin ranked 2nd highest in Europe for accommodation and co-working costs in the Working Abroad Index. It was also at the upper end of the scale for public transport (3rd) and ‘additional costs’ (4th, including telecoms and internet). The cost of eating out was the sole category in which Dublin ranked outside the top 4, placing in 13th position according to Bunq. Average monthly costs to work remotely across international borders from Dublin have risen to €2,634 in 2024.

DUBLIN'S INTERNATIONAL RANKINGS DUBLIN'S LATEST INTERNATIONAL RANKINGS Source

Benchmarking Criteria

Year

Ranking

Global Financial Centres Index

Business Environment, Human Capital, Infrastructure, Financial Sector Development, and Reputation

2024

14

▲

LinkedIn ‘Hiring Rate’ Metric

Growth in hiring activity amongst employers

2024

1

-

Sony Computer Science Laboratories Walkable Cities Index

Proportion of population living within a 15-minute walk of essential services

2024

5

-

Bunq Working Abroad Index

Accommodation, co-working, public transport, hospitality, and additional costs

2024

2

-

QS World University Rankings

University quality

2025

87*

▼

Mercer Cost of Living City Rankings

Cost of consumer goods and services

2024

41

▼

fDi Small Regions of the Future

Economic potential, human capital and lifestyle, cost effectiveness, connectivity and business friendliness

2024

1

-

fDi European Cities and Regions of the Future

Economic potential, human capital and lifestyle, cost effectiveness, connectivity and business friendliness

2024

3

-

Mercer Quality of Living City Rankings

Environmental/ socio-economic factors

2023

42=

▼

ECA International Cost of Living report

Multiple criteria including food, household goods, clothing, electrical goods, motoring, meals out, alcohol, utilities and public transport

2023

38

▼

InterNations Expat City Ranking

Quality of Life, ease of settling in, working abroad, personal finance, and expat essentials

2022

37

▲

Eden Strategy Institute Top 10 key factors covering governance, resourcing, smart 50 Smart City Governments programmes, policies and ecosystem

2021

26

▲

EU European Capital of Innovation Awards

Inter-disciplinary ecosystems, and promotion of innovative initiatives to improve wellbeing of citizens

2021

2

▲

fDi x TNW European Tech Cities of the Future

FDI performance, connectivity, cost effectiveness, economic potential, innovation & attractiveness

2021

3

-

fDi Global Cities of the Future

FDI performance, connectivity, cost effectiveness, economic potential, innovation & attractiveness

2021

5

▼

EY Financial Services Brexit Movement of services and staff at financial services firms in 2022 Tracker the UK since the Brexit referendum in 2016

1

-

INSEAD Global Talent Competitiveness Index

Regulatory, market and business/labour landscape, external and international openness, education and access to growth opportunities and sustainability and lifestyle

2022

10

▼

PwC-ULI Emerging Trends in Real Estate Europe

Outlook for investment and development, and the scale/ liquidity of the city's market

2021

13

▼

Startup Genome Global Startup Ecosystem Report

Performance, funding, market reach, connectedness, talent, experience

2021

36

-

2020

12

▼

IMD World Competitiveness 332 criteria related to competitiveness, digital Ranking competitiveness and talent ‡ CHANGE ON PREVIOUS PUBLICATION OF THE RELEVANT BENCHMARK. AN UPWARD-POINTING ARROW DENOTES AN IMPROVEMENT. *TCD.

// 13

HOUSING

Housing transactions decline across Q3 Dublin Residential Property Transactions (SA) 3,000

2,395 Max

2,500

2,000

1,500

1,000

Sep 24

Apr 24

Nov 23

Jun 23

Jan 23

Aug 22

Mar 22

Oct 21

May 21

Dec 20

Jul 20

Feb 20

0

Sep 19

500

SOURCE: CSO. SEASONALLY ADJUSTED BY GRANT THORNTON.

SEP '24 DUBLIN RESIDENTIAL PROPERTY TRANSACTIONS (SA)

1,623

YEAR ON YEAR % CHANGE

-13.2

IRELAND RESIDENTIAL PROPERTY TRANSACTIONS (SA)

5,614

YEAR ON YEAR % CHANGE

-5.6

Residential housing transactions had a strong start to Q3 but declined across the remainder of the quarter.

There were 2,120 (SA) properties sold in July, reflecting increases MoM (+34%) and YoY (+8.1%). This was the largest volume of transactions recorded in the first nine months of 2024. New build dwellings accounted for over a third (34%) of sales in the month, representing a significant 166% increase YoY. In contrast, transactions declined by 20.5% MoM in August to 1,684 (SA) and a further 3.6% MoM in September to 1,623 (SA).

Housing transactions followed a similar trend nationally, increasing by 16.7% MoM in July, before falling back in August. As demand for housing remains high, new developments should have a considerable impact on reshaping the market.

Residential property prices surpass Celtic Tiger peak Residential Property Price Index (2015 = 100) PROPERTY PRICE INDEX DUBLIN YEAR ON YEAR % CHANGE PROPERTY PRICE INDEX NATIONAL EXCL. DUBLIN YEAR ON YEAR % CHANGE

220 200 180 160 140 120

164.4 Max

100 80

National excl. Dublin SOURCE: CSO. NOTE: 2015 = 100.

14 //

Dublin

Sep 24

Sep 23

Sep 22

Sep 21

Sep 20

Sep 19

Sep 18

Sep 17

Sep 16

Sep 15

40

Sep 14

60

SEP '24 164.4 +10.9 211.1 +9.4

Residential property prices in Dublin continued to increase over Q3 2024, surpassing the Celtic Tiger peak index reading of 160. Prices in the Capital reached a new high of 164.4 in September, having recorded MoM growth rates of between 0.9% and 1.3% in each of the three months in the quarter. YoY increases of over 10% were also recorded across July, August and September, further highlighting the affordability challenges facing buyers. Outside of Dublin, house prices rose at a similar rate, reaching a new peak reading of 211.1 in September, reflecting growth of 0.8% MoM and 9.4% YoY. Increases in supply and recent interest rates cuts by the European Central Bank will likely prove influential as we look ahead to 2025.

HOUSING

Average residential rents hit new peak of €2,065 Residential rents € per month

Q1 '24

€2,200 €1,975 €1,750

€2,065 Max

€1,525 €1,300 €1,075 €850

Dublin

Greater Dublin Area

Q1 24

Q3 23

Q1 23

Q3 22

Q1 22

Q3 21

Q1 21

Q3 20

Q1 20

Q3 19

Q1 19

Q3 18

Q1 18

Q3 17

Q1 17

Q3 16

Q1 16

Q3 15

Q1 15

Q3 14

€400

Q1 14

€625

DUBLIN AVG RESIDENTIAL RENT € PER MONTH

2,065

YEAR ON YEAR € CHANGE

+130

Average residential rents in Dublin continued to rise for a ninth consecutive quarter in Q1 2024 (latest data available). Rents increased by 1.5% QoQ and by 6.7% YoY in the Capital, reaching a new peak of €2,065 per month in the quarter. Such growth rates were aligned with previous quarters and underline the affordability pressures facing many renters in the county. Average rents across the Greater Dublin Area (GDA) and outside the GDA showed similar rates of YoY growth in Q1, rising by 6.7% to €1,516 and 8.7% to €1,091, respectively. Affordability challenges and a shortage of supply continued to dominate the rental market nationwide.

Outside GDA

SOURCE: CSO, RTB. NOTE: Q1 2024 IS LATEST DATA AVAILABLE.

Housing completions reach fresh high in Q3 Dublin House Commencements & Completions TOTAL HOUSE COMMENCEMENTS YEAR ON YEAR CHANGE TOTAL HOUSE COMPLETIONS (SA) YEAR ON YEAR CHANGE

7,562

8000

Max

7000 6000

3,862

5000

Max

4000 3000 2000 1000

Commencements SOURCE: CSO, DHLGH

Completions (SA)

Q3 24

Q1 24

Q3 23

Q1 23

Q3 22

Q1 22

Q3 21

Q1 21

Q3 20

Q1 20

Q3 19

Q1 19

Q3 18

0

Q3 '24 6,056 +2,789 3,862 +176

Housing completions across Dublin reached a new high point in Q3 2024, as the volume of new units entering the Capital’s housing stock remained on an upward trajectory. A total of almost 3,900 new units (SA) were added to Dublin's residential stock in the quarter, an increase of 71.6% QoQ and 4.8% YoY. This is in spite of a challenging market, in which building and construction sector costs, including materials and wages, continue to rise. In contrast, housing commencements (non-SA) declined by 19.9% QoQ but remained elevated with 6,056 new residential units under construction in the quarter. This represented an 85.4% increase YoY and will continue to feed through to completions in the coming quarters. Residential construction has largely been supported by new government policies in 2024, aimed at addressing supply shortages. // 15

TRANSPORT & TRAVEL

Public transport journeys fall in Q3 Public Transport Million Trips (SA) PUBLIC TRANSPORT MILLION TRIPS (SA) YEAR ON YEAR % CHANGE

80 69 57 46 34 23

0

Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24

11

Luas

Irish Rail

Bus Éireann

Dublin City Bus

Q3 '24 69.1 +9.1

Public transport journeys in Dublin fell QoQ in Q3 2024, but remained up on a YoY basis. A total of 69.1 million trips (SA) were recorded in the quarter, down by 2.2% from a peak of 70.7 million (SA) in Q2.

Bus Eireann was the only mode of transport to record QoQ growth in Q3, increasing by 3.5% to 2.4 million journeys (SA). The Lucas (-7.5%), Irish Rail (-3.9%) and Dublin City Bus (-2.2%) all recorded QoQ declines. YoY growth was recorded across all modes of public transport analysed, in what is an indication of the rude health of the economy. The Luas recorded the largest increase (+12.1%), followed by Irish Rail (+11.5%), Bus Eireann (+11%) and Dublin City Bus (+7.7%). Public transport is a key focus of the Dublin night-time economy (as featured on page 9), and is considered vital to ensuring safe and accessible travel for everyone.

SOURCE: NTA. SEASONALLY ADJUSTED BY GRANT THORNTON.

Dublin road traffic volumes increase in autumn 2024 Dublin Average Daily Traffic Count '000s (SA) AVERAGE DAILY TRAFFIC COUNT (SA) YEAR ON YEAR % CHANGE PEAK VOLUME COUNT (AM)(SA) YEAR ON YEAR % CHANGE PEAK VOLUME COUNT (PM)(SA) YEAR ON YEAR % CHANGE

900 800 700 600 500 400 300

201,469

200

SOURCE: TII. SEASONALLY ADJUSTED BY GRANT THORNTON. DATA IS WEEKLY.

16 //

Nov 24

Jun 24

Jan 24

Sep 23

Apr 23

Jul 22

Dec 22

Feb 22

Oct 21

May 21

Jan 21

Aug 20

Mar 20

Nov 19

100

Min

NOV '24 698,012 +2.8 49,558 +3.2 51,408 +2.6

Traffic volumes on eight main roads in the Dublin region declined MoM over the summer period. Average daily traffic counts stood at 602,500 (SA) in the region in the third week of August, a decline of 3.1% from the same week in July. This broadly repeated a trend of declining traffic volumes in the late summer periods of both 2022 and 2023, and a post-summer pick-up may hence be expected. MoM declines were mainly driven by lower off-peak traffic volumes which contrast to peak AM and PM periods where respective MoM increases of 5% and 1.1% were recorded.

TRANSPORT & TRAVEL

Passenger throughput at Dublin Airport remains strong in Q3 Dublin Airport Passengers '000s (SA) TOTAL PASSENGERS '000S (SA) YEAR ON YEAR CHANGE '000S TRIPS (SA) 10,000

8.7m

9,000

Max

8,000 7,000 6,000 5,000 4,000 3,000 2,000

Q1 24

Q3 24

Q1 23

Q3 23

Q1 22

Q3 22

Q1 21

Q3 21

Q1 20

Q3 20

Q1 19

Q3 19

Q1 18

Q3 18

Q1 17

Q3 17

0

Q3 16

1,000

Q3 '24 8,655 +238

Passenger numbers at Dublin Airport remained strong in Q3 2024, as its summer scheduled concluded. Almost 8.7 million passengers (SA) travelled via the airport in the quarter, reflecting a minor 0.1% decline QoQ. There was however YoY growth of 3.5%, with an additional 294,000 passengers compared to the same quarter in 2023. The airport recorded its busiest month to-date in August 2024, with throughput of almost 3.5 million passengers. It has experienced significantly strong levels of activity in 2024 YTD, with Q3 benefitting from busy summer travel and local big ticket events including Coldplay’s four sold-out concerts, the College Football Classic and Ireland’s Nations League matches.

SOURCE: CSO & DUBLIN AIRPORT. SEASONALLY ADJUSTED BY GRANT THORNTON.

Port activity increases in Q3 Dublin Port Tonnage Million Tonnes (SA)

Q3 '24

10.1

11

Max

10 9 8

Min

5 4 3 2

Total Tonnage

Exports

Q1 24

-0.14 5.65 +0.20

Q3 24

Q1 23

Q3 23

Q3 22

Q3 21

Q1 22

Q1 21

Q3 20

Q3 19

Q1 20

Q1 19

Q3 18

Q1 18

Q3 17

Q1 17

Q1 16

Q3 16

1 0

3.40

YOY CHANGE MILLION TONNES (SA) DUBLIN PORT IMPORTS MILLION TONNES (SA) YOY CHANGE MILLION TONNES (SA)

Activity levels at Dublin Port increased in Q3 2024 as a total throughput of 9.1 million tonnes (SA) was handled in the quarter. This reflected expansions of 1.5% QoQ and 0.7% YoY. Growth was driven by increased volumes of imports which stood at almost 5.7 million tonnes (SA) in Q3, representing rises of 2.8% QoQ and 3.7% YoY. In contrast, exports remained relatively stable QoQ (-0.6%) but declined by 4% YoY to stand at 3.4 million tonnes (SA). Higher levels of imports may be indicative of the rude health of the domestic economy.

7 6

DUBLIN PORT EXPORTS MILLION TONNES (SA)

Imports

SOURCE: DUBLIN PORT. SEASONALLY ADJUSTED BY GRANT THORNTON.

// 17

SPECIAL REPORT

The Outlook For Dublin’s Hotel Market Anne Walsh

Head of Accommodation Development at Fáilte Ireland

Fáilte Ireland consistently monitors hotel markets across the country, the following article provides some common themes and unique characteristics influencing Dublin’s market performance and investment decisions in the sector.

Economic Outlook The Irish economy continues to expand, and more jobs continue to be added. Inflation has slowed rapidly, and wages are rising in 'real' (i.e. inflation adjusted) terms.

This will help to underpin consumer spending at home.

Global GDP growth is expected to remain stable at c3% per annum over the medium term. While the US election result brings with it some added uncertainly, any negative impact will hinge on what the new regime's policies do to economic growth and the dollar. Looking at the last time around, from the perspective of Irish

18 //

tourism, there was steady growth in US trips to Ireland and healthy growth in spending in Ireland.

Dublin hotel performance has recovered Following an exceptional year for hotel trading performance in 2023, operational performance saw a slowdown in the opening months of 2024. However, YTD September hotel occupancy is clearing 80% across Dublin, a European high and clearly demonstrating a market that has capacity constraints. Compression nights (occupancy >95%) are evident and are mainly being driven by transient leisure demand, particularly around major sporting, entertainment and cultural events. These compression nights are a symptom of supply struggling to meet demand and with dynamic pricing, high-demand nights put strong upward pressure on room rates. Average room rate grew year-on-year from 2019, with a marginal decline in 2024 of c3% YTD September, however still exceeding €180.

Over 75% of room nights in hotels are international, demonstrating the reliance the hotel sector has on the overseas market. The decision on the Dublin airport cap will be critical to future tourism performance. With demand for air travel expected to continue rising and

SPECIAL REPORT

with Dublin being the main access point, a continued cap at Dublin Airport, will have a detrimental impact on Ireland’s ability to grow tourism.

Increasing costs impacting profit Although rate and occupancy are performing well, concerns remain that rising costs will significantly erode profitability. Rising costs are not easing for the sector, which is highly exposed to cost pressures and recruitment and retention issues. Ireland’s minimum wage rate sits 69% above the EU average in 2023. Wages and salaries in Ireland’s Accommodation and Food sector are, on average 23% higher than the EU average. Higher energy costs, higher food prices, the increase in VAT, increases in financing costs and other input costs are all having an impact on profit conversion.

Dublin’s hotel capacity and pipeline The National Quality Assurance Framework (NQAF)1 recorded c63,300 registered bedspaces in Dublin as of Q2 2024, with hotels accounting for 89% of NQAF accommodation supply. The short term lets (STL) stock to Q2 2024 is estimated at 20,200 bedspaces, a market that has experienced significant growth postpandemic. STL supply varies significantly throughout the year, and based on international evidence, it is likely that STL stock will be impacted by the introduction of the Short-Term Letting Register.

Hosting displaced Ukrainians and others seeking international protection is taking tourist accommodation stock out of the market that would otherwise be available tourism. In Dublin c10% of all Fáilte Ireland registered stock is under contract. This amounts to c6,800 beds with an estimated 9,100 beds under contract in additional unregistered establishments.

As of Q2 2024, c5,050 bedspaces were under construction in Dublin, with c4,050 bedspaces located in Dublin city. Hotels account for the largest share of the construction activity. Dublin will see a number of new hotel brands entering the market to include Courtyard by Marriott, Sofitel, Hilton Home2, Citizen M and Hoxton.

Dublin has approximately 20,400 bedspaces in the pipeline at a ‘plans granted’ stage, however there is no certainty as to how many of these bedspaces will reach practical completion.

Rising costs are not easing for the sector, which is highly exposed to cost pressures and recruitment and retention issues.

Transaction activity has rebounded and the outlook for the investment sector remains solid Transaction activity within the Irish hotel market has rebounded significantly. In the first three quarters of 2024, sales values reportedly reached €860m. This compares to €350m in 2023. The expectation by year end is sales values of c€1bn.

Investor interest remains high, particularly in Dublin, driven by strong economic activity, the robust occupancy and rate performance and the rise in overseas visitors and domestic trips.

In Dublin, notable transactions include The Shelbourne (c€260m), Radisson Blu Dublin Airport (c€83m), Grand Hotel, Malahide (c€50m), Hard Rock Hotel, Dublin 8 (c€63m), Radisson Blu St Helen’s (c€45m) and The Fleet Hotel, Dublin 2 (c€45m).

The hotel sector - an economic driver Dublin hotels fill a compelling market need. The economic contribution of accommodation provision in Dublin generates €1.185bn expenditure annually.

Nearly 10,000 jobs and €400m in employment income are attributed to the accommodation provision. The hotel industry is an essential economic driver and is responsible for creating jobs, generating tax revenue, stimulating economic activity, promoting sustainability and have a placemaking impact. Hotels are a vital part of Dublin’s infrastructure.

1 THE NATIONAL QUALITY ASSURANCE FRAMEWORK (NQAF) IS AN UMBRELLA TERM USED TO CAPTURE THE STATUTORY AND NON-STATUTORY TOURIST ACCOMMODATION REGISTERS THAT ARE MANAGED BY FÁILTE IRELAND.

// 19

Dublin Economic Scorecard ECONOMY

25

S&P Global Business PMI Q3 2024

Unemployment Rate Q3 2024

SpendingPulse Sales Index Q3 2024

3 MONTH MOVING AVERAGE (SA)

% (SA)

INDEX (2015 = 100) (SA)

52.8

63

4

4.7

10

112

145

150

TRAVEL

12.2

Hotel Occupancy Rate Oct 2024

Seaport Cargo Q3 2024

Public Transport Trips Q3 2024

% OF TOTAL ROOMS

MILLION TONNES/QUARTER (SA)

MILLION TRIPS/QUARTER (SA)

88.3

93.6

7.6

9.1

10.1

13.7

69.1

71

RESIDENTIAL PROPERTY

1,125

Average Residential Rents Q1 2024

Residential Property Price Index Sep 2024

Housing Completions Q3 2024

€/QUARTER

INDEX (2015 = 100)

UNITS/QUARTER (SA)

2,065

2,065

84

164.4

165

888

3,862

3,862

COMMERCIAL PROPERTY

64

Dublin City Centre Office Rent Q3 2024

Dublin 2/4 Office Vacancy Rate Q3 2024

Dublin Suburbs Office Vacancy Rate Q3 2024

INDEX (2006 = 100)

%

%

114

118

4

17.0

19

6

16.6

17

SOURCES: CSO, PMI S&P GLOBAL; SEAPORT CARGO DUBLIN PORT; PUBLIC TRANSPORT NTA; RESIDENTIAL RENTS RTB; COMMERCIAL PROPERTY CBRE RESEARCH, HOTEL OCCUPANCY STR GLOBAL. NOTE: THESE "PETROL GAUGE" CHARTS PRESENT THE PERFORMANCE OF THE PARTICULAR INDICATOR RELATIVE TO A RANGE OF PERFORMANCES FROM MOST POSITIVE (GREEN) TO LEAST POSITIVE (RED). EACH GAUGE PRESENTS THE LATEST VALUE COMPARED TO THE PEAK VALUE AND THE TROUGH VALUE OVER THE LAST DECADE (EXCEPT FOR PUBLIC TRANSPORT TRIPS, MASTERCARD SPENDINGPULSE AND STR GLOBAL WHICH COVER THE PAST 5 YEARS, HOUSING COMPLETIONS WHICH COVER THE PAST 6 YEARS). THE COMMERCIAL PROPERTY GAUGES ARE RED AT THE HIGH AND LOW EXTREMES, IN RECOGNITION OF THE UNDESIRABILITY OF RENTS THAT ARE EITHER TOO HIGH OR TOO LOW AS WELL AS VACANCY RATES.