“Tonight is about 78 per cent [occupancy], which would be quiet, and we’ll go up to 100 per cent tomorrow. Then it’s a bit of a lull until next Wednesday, and we’re then at 100 per cent through until the 31st [of December],” says Merrion Hotel general manager Peter MacCann as he explains the flow of business over the festive season.
Packages for Christmas Day, starting at €1,200, were sold out “some time ago”, he says.
“Thirty years ago, Christmas was a maudlin week in hotels in Dublin. It was generally local families who’d lost somebody in the previous three months. Now it’s full-on party time, and has been for 10-15 years. And we have three or four weddings between Christmas and the new year, too. There’s a general high level of business that week.”
MacCann will pop into the hotel on the 25th “for a short while and to say hello to a few people”, and then he’s back on the 27th.
Overall, the Merrion has had a “really good year”, he says, in spite of still being subjected to pandemic-related restrictions in the first quarter of 2022. “The bounce back, post-Covid, took the whole industry by surprise. City centre hotels did better than the resort properties. A combination of that and the phenomenal demand out of North America to visit Ireland, born out of pent-up frustration to travel and [favourable] exchange rates.”
American visitors make up about one-third of the Merrion’s annual bed nights.
MacCann estimates that turnover for this year will hit €28 million. This compares with just €9.9 million last year, due to Covid-19 lockdown restrictions, and €25.6 million in 2019, its latest full year of uninterrupted trading.
The bounce back, post-Covid, took the whole industry by surprise
MacCann says the occupancy rate was higher in 2019 (86 per cent versus 70 per cent this year), but the room rate in 2022 is up 11 per cent, although he’s not willing to divulge the actual figure in euro terms.
“In 26 years here I’ve never, ever disclosed our average rate as a figure,” he says with a broad smile.
We are chatting in the Waterloo room, on the first floor of the hotel. So named as one of the buildings that houses the five-star property was the birthplace of the Duke of Wellington, Arthur Wellesley, who defeated Napoleon’s French army at Waterloo. On the walls are artworks depicting the generals on both sides of the battle in 1815.
They are owned by Lochlann Quinn, chairman of the hotel’s board, a keen art collector and a 25 per cent shareholder until recent years when he has transferred his shares to his children.
It was Quinn and his business partner in Glen Dimplex, Martin Naughton, who had the original vision for the hotel, buying the four buildings from the State on Merrion Street for £3 million (€3.8 million) in 1991.
Quinn, who is 81, joins us for the interview and recalls being really taken by the possibilities for the project, located opposite Government Buildings. “I thought the location was made in heaven and the buildings were fantastic ... in reasonably good shape,” he says.
Charlie Haughey wanted to turn this place into his office, but the civil servants said no
Nonetheless, the Irish economy was in a much different place 30 years ago to now with few five-star hotels. Wasn’t it a big risk to take on such a major project?
“I suppose it was, but Martin and myself had the money to do it. Glen Dimplex was doing quite well, so we had a fair amount of resources. I thought it couldn’t fail. We got the building quite cheap. Charlie Haughey wanted to turn this place into his office, but the civil servants said no.
Having bought the properties, Quinn later realised that he knew nothing about running a hotel. “I said to Martin after we had gotten planning permission, ‘We know nothing about hotels, and any time where I’ve seen people go into an industry where they know nothing about it, they generally make a balls of it. So we should try and get a partner’.”
Naughton agreed. “So I wrote to most of the major hotel chains globally, Hilton, Hyatt etc, and got a flat rejection from everybody. One day, Billy Hastings [of the Hastings hotel group in Northern Ireland] knocked on our door in Dublin and said: ‘I hear you’ve got a project and you’re looking for a partner’. It didn’t take him more than 10 minutes to see the prospects.”
The Hastings chain currently owns 50 per cent of the Merrion Hotel, although there has been speculation that it wants to sell the stake. “They denied it when I asked them, saying it’s not for sale. They’re still on board, good partners,” Quinn says.
The Government has been really good to this industry in the last three years
A topic of huge debate in the hotel industry is the Government’s plan to remove its special 9 per cent VAT rate at the end of February. The sector is lobbying furiously to have it extended. What’s MacCann’s view, will it make a difference to a high-end hotel such as the Merrion?
“The Government has been really good to this industry in the last three years. And I wouldn’t necessarily be roaring and shouting about its removal. We would prefer for it not to go but we can live with it,” he says.
The industry has been accused of price-gouging in political circles, and MacCann says customers are being soaked by some establishments. He cites a case where five young men were coming to Dublin from Scotland for two nights and were being quoted €1,400 to stay in a hostel.
“There’s that type of raw gouging that’s going on, but it’s not in the established properties, if I can call them that. It’s at a lower level in the industry.”
We met on Wednesday, and a stay for two people in a standard room that night would have been €495 for bed and breakfast. Is that value for money?
“There’s 400-odd staff working here ready to do whatever you want them to do. You’re going to sit among one of the finest art collections in the country. You’re going to eat well. That’s what we do, and I think it’s value for money. I don’t have any difficulty justifying our prices for the level of service we give,” MacCann says, adding that Irish five-star hotels give excellent value for money compared with their peers in other major cities.
According to MacCann, the Merrion’s rack rate (the highest rate that will be charged for a particular room that is notified to Faite Ireland) is €695 for a standard room, but it only gets to charge that for 10-15 per cent of the time during the year. “We spend most of the year discounting our rate to try and get business,” he says.
The business went from 100 per cent occupancy to 2 per cent overnight. We lost two thirds of our workforce
The Merrion is unquestionably a stunning property, brilliantly located and well invested with a lot of front of house staff to serve customers in a warm atmosphere.
But Covid had a huge impact on the industry, including the Merrion. Some 257 staff were let go, the hotel was like a ghost town for much of the pandemic, and revenues plummeted. The effects are still being felt.
“The business went from 100 per cent [occupancy] to 2 per cent overnight,” MacCann says. “We lost two thirds of our workforce. We’ve had to replace them with a newer, younger workforce, who are the nicest and most willing people but vastly inexperienced. That has made this year operationally extremely challenging and difficult.”
The hotel, he says, has been looking to hire a painter to work three days a week to keep the hotel looking smart but “we can’t find any, we just can’t find one”.
“We’ve been recruiting for housekeeping staff aggressively for the whole year. We’ve increased in some cases our entry wage levels by 50 per cent to attract staff, and we can’t find them. It’s a First World problem as we’re running a very busy and successful operation, but there are enormous challenges.”
Before Covid, the Merrion used to average 10,000 applications a year for jobs, would do up to 1,200 interviews and “get about 100 staff out of that”, MacCann says. “Now we get 1,000 applications a year and that would be it. The demand has collapsed.”
He says the hotel applied in August 2021 to the Departments of Foreign Affairs and Justice for eight visas for experienced Indian chefs on salaries “north of €35,000″ to meet the criteria laid down, and “it took a year to get those visas”.
To aid its recruitment efforts, the Merrion is considering building accommodation for staff at a site it owns around the corner.
Energy prices have also soared. MacCann gives the example of September, when its combined electricity and gas bill was €164,000, compared to €42,000 for the same month in 2019. Three budgets have been submitted to the board this year and much of the rise in energy costs will have to be absorbed by the company, he says. “We don’t know what the bottom line is going to be, because it’s going to be influenced so dramatically by utilities.”
A lot of people decided during Covid to change careers or take a step back, but not MacCann. “No,” he says in a whisper. “Anything I’d like to do wouldn’t create enough money for me. It never crossed my mind. Even during Covid I loved coming in to work.”
The one thing that has changed is that he doesn’t wear a suit to work any more, instead changing in and out of a suit at the hotel when he arrives at work and leaves the building in the evening. “In my mind, when I walk out of here I’m gone, and when I come in here I switch on again. Covid has taught me that. I meet people on the street and they don’t recognise me because they only know me in a suit, and it’s great.”
I’ve no desire to retire. I love coming to work
MacCann grew up on a farm in Co Meath run by his father. His mother, who is 90, was a vet. His father saw there was no future in beef farming and decided that he didn’t want any of his children to take it on.
“I was not academic. I wouldn’t be boasting about my Leaving Cert results and there was a sense of panic at home as to ‘what are we going to do with this idiot?’. My mum said one day: ‘I think Peter would be very good in hotels as he gets on with people.’ Prior to that, I had stayed in a hotel in Bettystown on a holiday, and that was my only exposure to hotels. She knew somebody, and I got a job as a trainee manager with Fitzpatrick Hotels in Killiney.
“It was extremely tough but great fun. It was 80 hours a week or more at the time. You might get holidays or you might not. I gave it three months, then another three months and another three months.”
He did four years there before joining Trusthouse Forte in the UK, working in various properties in London and rural parts of England and Wales. He returned to a management role in the Conrad in Dublin in 1990, where he had a “very successful” five years and met his wife.
He then became general manager of Sheen Falls before getting a tap on the shoulder from Billy Hastings at a dinner the Kerry hotel was hosting one night. Ironically, a recruiter in London had some time earlier contacted MacCann to ask if he would be interested in running the Merrion, which was still a long way off its opening.
“She said ‘there’s two businessmen who are starting a hotel in Dublin, have you any interest in it?’. I said ‘who are they?’ She told me and I’d never heard of them. I asked if there were any hotel people involved and she said: ‘No’, and I just said: ‘I’m not going near it, they won’t have a clue’.”
Hastings’ later approach led to MacCann travelling to meet Quinn and Naughton and the rest is history.
MacCann turned 61 recently but has no plans to step back. “I’ve no desire to retire. I love coming to work. Whenever that time comes, it will either be the ownership decides it’s time for me to go, my health will tell me to go, or circumstances outside my control will change.”
“When we find somebody better,” Quinn chips in.
“Oh, there’s plenty of them, plenty of them,” MacCann quips back. “Getting a replacement wouldn’t be difficult.”
CV
Name: Peter MacCann
Job: general manager, Merrion Hotel
Age: 61
Family: married with two adult sons
Lives: Rathgar, near the Russian embassy; he has a Ukrainian flag hanging out the window.
Favourite other Irish hotel, and overseas property: Dromoland in Ireland and the Tikida Golf Palace near Agadir in Morocco
Something we might expect: he wears a suit at work every day
Something that might surprise: he likes to restore furniture in his spare time, including some pieces for the hotel. “I’ve French-polished most of the tables in the drawingrooms here. I’ve two tables from the hotel at home at the moment.”
