What a turnaround it has been in just a few short years for Dalata.
Brought to its knees along with the rest of the hospitality sector by the pandemic in 2020 and 2021, Ireland’s largest hotel group announced in a trading update on Thursday that it was on track for another record in 2023 and poised for further growth in 2024.
The operator of the Maldron and Clayton hotel brands said it expects annual revenues to exceed €600 million this year, just 12 months after breaching the €500 million mark for the first time.
Remember, this is a group that saw its revenues plunge by almost 60 per cent in the first year of the pandemic. Its share price fell as low as €2.50 after raising €94.4 million in a September 2020 share placement.
However, clever management of its balance sheet under Dalata’s then chief executive Pat McCann (and his successor Dermot Crowley) through the sale and leaseback of the Clayton Hotel Charlemont in Dublin, raising €160 million in the process, helped right the ship.
Since then, global travel has resumed and room rates in Dublin city have, much to the chagrin of visitors, ticked ever upwards in the face of strong demand and tight supply due, in part, to accommodation being provided for Ukrainian refugees.
It is Dalata’s UK expansion that is fuelling the current bout of investor optimism, which has sent the group share price up by almost a quarter this year to €4.30.
The company opened three new hotels in the UK and the Netherlands this year, and expects to add four more properties in 2024, including its first hotels in Brighton and Liverpool. The new locations will add 834 rooms to Dalata’s portfolio of more than 10,000.
Certainly, the analysts are happy, with Davy – the company’s broker – upgrading its forecast for the share price no less than four times in the past year. One question for the group is whether travel and tourism can keep up the pace established in the wake of Covid or fall back to a lower base as economies slow and consumers tighten their belts.
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