The Irish Hotels Federation has broadly welcomed the Jurys acquisition of the Doyle Hotel Group, hailing it as a positive endorsement of the success of the industry.

Chief executive Mr John Power said it was "gratifying" to see a £200 million deal in the sector.

The merger of the State's two largest hotel operations puts the group into a very different league from its Irish rivals. In terms of bedroom numbers, the Doyle group is the largest hotel chain, closely followed by Jurys. The Aer Rianta-owned Great Southern Hotels is third, with Ryan and the Regency chains making up the top five.

The next change in ownership among the top five is likely to be at the Great Southern with Aer Rianta expected to put the group on the market as part of its efforts to restructure its operations. The chain comprises eight hotels and could have a price tag of around £50 million. It is likely to be viewed by both Irish and international operators.

A strong economy and a buoyant tourist market have triggered huge growth in the number of hotels operating in the market, particularly in the Dublin area, with many of the major international names now open for business in Ireland.

According to the 1998 hotel industry survey, some 13 new hotels opened in the Republic, bringing the total number to 730. The total number of rooms is now 27,200 and is expected to rise to 30,900 by year-end and 35,500 by 2000.

The growth has been particularly strong in the luxury end of the market with five five-star hotels currently operating in Dublin. As a result, the average daily room rate has increased from £101 to £110. Profit before tax per room has risen to £11,863 from £11,279 last year.

Internationally, the trend in the sector has been towards consolidation and, in the years ahead, analysts believe the Jurys acquisition of Doyle may kickstart other link-ups. Ironically, the creation of the Jurys Doyle Hotel Group would not have been permitted some five years ago because of their dominant positions in the market. But with the rapid growth in that sector, the stake held by the two major players has been diluted and it is unlikely to be blocked by the Competition Authority.