Dalata expects earnings to rise by 40% as Dublin hotel performances improve

THE CHIEF executive of the State’s largest hotel group expects earnings at the company to increase by 40 per cent on the €2 million recorded last year.

The Dalata Hotel Group, which is led by Pat McCann, operates 4,700 hotel rooms. It recorded earnings before interest, tax, depreciation and amortisation (ebitda) last year of €2 million, up from such earnings of €800,000 in 2010.

“It was a much improved performance last year,” Mr McCann said yesterday. “We had a low point in 2009 and we have continued to make progress since. Last year was a decent performance in a tough environment.”

The group has grown rapidly during the recession, taking on management contracts for troubled businesses such as the Citywest Hotel in Dublin, the Heritage Golf and Spa Resort in Portlaoise and Whites of Wexford.

Mr McCann said between leased and managed properties, the group employed 2,500 people.

He said the anticipated 40 per cent growth in ebitda this year arose from improved performance in its Dublin hotels and the group operating more managed properties.

“There is good growth this year, but we are cautious,” he added.

“There are still issues around consumer demand. We are performing well, but there is still a long way to go.”

Mr McCann was commenting on accounts just filed with the Companies Registration Office, which show that Dalata increased its revenue from €29.1 million to €29.6 million in the 12 months to the end of December last.

The figures show that the group recorded a profit of €6.4 million.

However, the profit arose from an exceptional gain of €8.3 million related mainly to the gain on the €7.9 million sale of discontinued operations to Dalata.

The figures show that the group’s operating losses fell by 45 per cent from €1.95 million to €1 million last year.

Interest payments of €803,000 added to the losses and a tax credit resulted in a loss of €1.82 million before the exceptional gain was taken into account.

Numbers directly employed by the group last year fell from 377 to 348, with payroll costs reducing from €10.6 million to €9.5 million.

“Trading conditions in the sector improved in 2011 with some demand growth in Dublin. As the year progressed there was stabilisation in the rest of the country, although some regions saw demand decline further,” the directors’ report said. “Overall, the market remains weak with business in Irish hotels generally significantly below the market peak of 2007.

“The group, operating with modern properties in the mid-scale segment, is well positioned to compete successfully in the prevailing difficult economic climate, offering good value to both corporate and leisure customers,” the report continued.

“The directors are confident that through effective yield management and prudent management of costs, the group will return the continuing operations to profitability.”