Courtyard Virginia Hotels|"Dalata Plans Hotel Expansion After Sales Boost"

Source              :    irishtimes.com
Category         :    Courtyard Virginia Hotels
By                   :    Mark Paul
Posted By      :    Hotels in Virginia Beach North Courtyard

Courtyard Virginia Hotels

The largest chain in the country, the Dalata hotel group which operates 34 properties, is planning further expansion following strong sales growth in 2012, as the recovery in the country’s hotel market gathers pace. Dalata, founded in 2007 by the former Jurys Doyle chief executive Pat McCann, saw its revenues climb last year by 55 per cent to €54.1 million, according to accounts obtained by The Irish Times. It added five new properties in 2012. Dalata’s operating profit more than doubled to €3.2 million but it still made a loss of €2 million after charging interest and tax. About €4.1 million of the interest charges, however, were paid out on loan notes held by the company’s shareholders, including McCann. Dalata owns the 12-strong Maldron chain of three and four-star hotels, which includes one property in Cardiff. It also operates a further 22 unbranded hotels in Ireland under management contracts, mostly on behalf of banks and receivers. It is backed by TVC Holdings and private clients of Davy stockbrokers.

“Trading conditions in the sector improved in 2012 with increased demand growth in Dublin. As the year progressed there was evidence of stabilization in the rest of the country,” Dalata’s directors said, before adding it is continuing to look for expansion opportunities. The five-star segment of the market is leading a rebound of hotels in the capital, according to a recent study by Crowe Horwath consultants, which also found that Dublin properties had occupancy of 74 per cent last year while rates at luxury hotels climbed 10 per cent. The Dalata directors continued: “The outlook for 2013 is positive with further growth expected in earnings, driven by gathering and conferences and events, particularly in Dublin.” The capital’s conference market is expected to receive a 15 per cent boost next year following the launch of Google’s Foundry research centre, which will bring an extra 15,000 overseas delegates to the city each year. Dalata highlighted the special 9 per cent VAT rate for tourism related services, and said it has boosted its trade. “The rate has ensured the group remains competitive in a difficult marketplace and has increased employment,” it said. Michael Noonan, the Minister for Finance, has hinted he is likely to increase the rate in next month’s budget, however, as it was only ever a “temporary measure” that costs taxpayers €360 million annually.

Dalata is examining further expansion opportunities in the UK, and is believed to have held talks with institutions about obtaining finance for any expansion. The group has bank debts of just €8 million, but owes its shareholders about €31.5 million in loan notes, which pay out interest of 9 per cent each year. The accounts state, however, that the loan notes must only be paid back if Dalata is sold, lists on the stock exchange, or sells some of its assets. The shareholders have shared almost €19 million in interest payments since 2007. McCann invested €1 million of his own cash in the notes, according to the accounts. The financial statements show that Dalata employed about 645 staff directly last year, up from 413 in 2011. Overall, however, about 2,500 people are employed by the hotels Dalata operates, including staff employed at the hotels it runs for other owners under management contracts. Its most high-profile properties are the Clyde Court and Ballsbridge hotels in Dublin, which formerly operated as Jurys and the Berkeley Court. They are now owned by a consortium of banks that seized them from the developer Sean Dunne, who bought them during the boom for €380 million. Dalata also last month bought out a loan attached to its Limerick Maldron hotel from Bank of Scotland (Ireland) at a discount of 78 per cent. It is expected to assume ownership of the property at the end of the year.

Source:irishtimes.com/business/sectors/transport-and-tourism/dalata-plans-hotel-expansion-after-sales-boost-1.1538919