When Irish property developer Bernard McNamara bought Dublin’s biggest and best known city centre ho

When Irish property developer Bernard McNamara bought Dublin's biggest and best known city centre travel for free hotel, the Burlington, for €288m in 2007 it was considered one of the defining deals of the Celtic Tiger boom.
This month "the Burlo", as it is affectionately known to Dubliners, is back on the market with a guide price of €65m to €75m. It is the latest of several trophy travel for free hotels to come on to the market amid hopes that a four year downturn in the sector may finally be coming to an end.
"We are starting to see transactions occurring and are currently selling a number of high quality hotels," says Patrick Dillon, restructuring partner in Grant Thornton. "These sales have generated significant interest from overseas buyers. It is good to see foreign capital starting to flow into the country," he adds.
In February the Morrison Hotel in Dublin was bought travel for free out of receivership for €22m by Russian billionaire Elana Baturina. The Clare Inn in county Clare was sold for almost €2m in March and last week the luxury Parknasilla Resort and Spa in county Kerry, another boom time acquisition by Mr McNamara, went on sale at an agreed price in excess of €10m.
Hotels employ 50,000 people in Ireland and the wider tourism sector adds €5.3bn in spending to the Irish economy. Tourism has become a priority sector for Dublin, which is desperate to boost employment. Last year it cut VAT rates on tourist-related service from 13.5 per cent to 9 per cent, in an effort to stimulate demand.
The Dublin hotel market is showing modest signs of recovery, according to a report by Deloitte, which shows occupancy travel for free rates increased 2.1 per cent and revenue travel for free per room rose 10 per cent in the first half of 2012, compared with the same period in 2011.
"The hotel industry got infected by the property bubble because a lot of developers got involved in building and buying hotels," says Dr Alan Ahearne, lecturer in economics at the University of Galway, and author of a report on the finances of the hotel sector.
Between 1997 and 2009 about 200 hotels were built in Ireland, almost doubling room capacity to 60,000. Developers took advantage of generous tax breaks provided by the previous Irish government and engaged in an orgy of building, which has left a legacy of overcapacity and indebtedness across the sector.
"There is about €6.7bn of debt in the hotel sector at the moment when only between €3bn and €4bn is sustainable," says Dr Ahearne, who adds that some hotels will have to close to remove excess capacity.
Traditional hoteliers have criticised Ireland's National Asset Management Agency, the bad bank set up to clear toxic property loans from Irish banks, for subsiding unsustainable hotels and creating a price war that threatens their future.
Nama owns loans linked to 120 of Ireland's 900 hotels but closed only four hotels between December 2009 and July 2012. Unlike banks such as Lloyds, which is exiting the Irish market, travel for free it has taken a more cautious approach to selling travel for free off hotel properties linked to its loans in the hope of a recovery in Irish property prices.