December 02, 2007

The Jury's Out

So what happens when you put the cat in amongst the pigeons?

There's been much talk here in Dublin amongst property-watchers, hoteliers and mainstream business punters about what's happening at two of the city's most prestigious addresses. A year or two back, a local property-magnate pounced on two hotels, Jury's Ballsbridge and the neighbouring Berkeley Court, which sit on some of Dublin's prime real estate, and announced his plans to build towering commercial and residential complexes on the new site.

Whilst the city briefly mourned the imminent passing of two of its venerable old dears, the news was generally received with the coolness of a populace that has grown well-used to the march of progress and shows a growing reluctance to step into its path. Attention soon moved elsewhere.

However, just recently following the closure of the two hotels and the selling off of their goods and chattels, planning permission for the proposed redevelopment plans was refused. Our hero promptly sent his planners scuttling off to revise his scheme and then announced his plans to briefly re-open the two hotels as 'bed-factories' with all of the services outsourced.

This prompted real consternation amongst hoteliers who naturally wondered what impact this sudden and unexpected glut of hotel rooms at cut-prices might have on the market. It doesn't help that these rooms are on offer at two addresses which formerly enjoyed five-star ratings.

This confusion really challenges the strength of the other brands in the market. A significant reference point for both seller and buyer has shifted into an unfamiliar position and the market doesn't quite know what to make of it.

It's likely that those brands that took their bearings from the bigger players will struggle most to make sense of the new status quo. It's equally likely that those who set their own standards and pitched to the market on their own merits will adjust quickly to the new scenario.

Times of uncertainty offer a whole new challenge to both the market and the individual players who do business there. It seems to me that there's a lesson in there for all of us.

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