The Irish government is closing in on the €100M purchase of Dublin’s Citywest Hotel — once touted as a major convention and leisure hotel — as part of a significant expansion of asylum-seeker accommodation, according to The Irish Times.

The final steps are being taken toward a purchase of the 764-bedroom hotel, Ireland's largest, which could pave the way for a doubling of the capacity there, with up to 1,000 more people to be accommodated.

At its peak in 2022, around 240 hotels in the country were being used to house refugees and asylum-seekers, especially the large number of displaced Ukrainian nationals, accounting for almost 30% of the country's overall hotel stock.

This had raised major concerns over hotel capacity for tourists and its impact on the tourist industry, although Dublin’s visitor numbers have surged in recent years and a spate of new hotels is set to open this year, including The Hoxton in the city centre.

Citywest has had a chequered history. First developed in the 1990s, Starwood European Real Estate Finance lent Tetrarch Capital €60M to fully acquire the hotel from Pimco in 2018 after it had been purchased for €29M in 2014, with a further €12M invested to upgrade the four-star property. The hotel had 30 different meeting and event venues as well as a convention centre for up to 8,000 people and an 18-hole, par-70 golf course.

The 2018 deal was designed to finance refurbishment as well as the repositioning of Citywest as a hotel, conference and entertainment destination. However, it became a self-isolation and quarantine centre during the pandemic and then switched to a humanitarian centre.

The latest news comes after the Department of Justice cancelled plans to open a 547-bed facility on the former Crown Paints site in Coolock, north Dublin, saying that it engaged with several entities in relation to International Protection Accommodation Services accommodation and regularly did not take up offers.

Operator Townbe Unlimited, founded in 2018, runs seven IPAS centres in Dublin, Kerry, Leitrim and Westmeath, accommodating more than 780 people, and had been set to make a €30M investment in the property.

The Irish government has set out plans to reduce dependence on private accommodations by developing state-owned facilities. This includes a commitment to provide 14,000 state-owned accommodation beds by 2028 as part of a plan to make 35,000 spaces available in total.