‘When I start buying hotels with golf courses...it’s over’ Dalata’s Dermot Crowley

“It’s been a really bad weekend,” says Dermot Crowley, chief executive of the Dalata Hotel Group. He’s referring to the Cork senior hurling team’s defeat the previous Sunday to Clare rather than a slew of empty rooms at the 53 hotels that comprise the Irish hospitality chain.

“I’m a big Cork hurling fan... we keep losing these classics by a point or two,” he laments with a shrug. He’s not a fan of the GAA’s new championship structure either, but that’s a whole other story for another day.

We’re meeting in the smartly appointed four-star Clayton Hotel in Leopardstown. General manager Simon Anglin tells me the hotel was full the night before.

The Clayton is well located, situated close to Leopardstown racecourse, the Central Park office campus and Sandyford Business District, both of them busy corporate hubs. After the interview, the foyer and public lounge are humming with activity.

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But Dalata, which listed on the Irish stock market a decade ago, last month reported “lower levels of trade in Ireland” so far this year, with RevPar (revenue per available room, a key industry metric) down 4 per cent for the period January to April on a “like for like” basis when compared with the same time frame in 2023.

[ Dalata spends €3m on refresh of four-star hotels and group ]

This followed two strong years of trading post the lifting of pandemic-related lockdown restrictions. Revenue last year rose by 9 per cent to €608 million from a portfolio of 53 hotels. In 2019, the last full year before Covid-19, it booked revenues of €429 million from a chain comprising 44 hotels.

Crowley cites a mix of factors for the recent soft trading. “In the first quarter of this year, there were over 2,000 additional rooms [in Dublin] versus the first quarter of last year,” he says, noting the opening of new properties and others that came back into the market, having previously been rented to the State.

We did simple things like cordless vacuums, which stops someone bending their back about 28 times a day, and they’re saving time

“On top of that, you had the VAT rate going from 9 to 13.5 per cent, fewer events as well, just the way the calendar fell. January and February were well behind. March was on par with last year, and then April was also behind because in that Easter week [of 2023] you had the [President] Biden visit.

“But as we look into May and June, bookings are strong, with lots of concerts, rugby matches on, and the Uefa Europa League Final in Dublin. The underlying corporate demand has been strong as well. It’s a different type of corporate. Some of the large users pre-Covid still aren’t back, the technology companies aren’t back using hotels as much as they did because of working from home and not travelling as much for business. All in all, it hasn’t been too bad.”

In the UK, London is “still recovering”, he says, but “provincial UK is doing okay”.

In spite of recent soft trading, Crowley says the outlook for the Dublin market remains bright, with the economy performing strongly and almost at full employment. In addition, just 600 new bedrooms are due to come on stream in each of the next two years, higher interest rates have made funding a challenge for new hotel developments, and new legislation will crimp short-term lets for tourists.

Business activity might have softened, but Dalata continues to invest in growth. It has just spent €3 million on a brand refresh to bring some consistency to its three brands – Dalata (the mother ship), and the four-star Maldron and Clayton hotels. Dalata will also open four new hotels in Britain this year, in Brighton, Liverpool, London and Manchester, to bring the portfolio up to 57.

Crowley bristles at the mention of price-gouging by Irish hotels, a charge levelled by some politicians over the past couple of years as rooms rates have risen post-pandemic – especially when big events are on. Crowley says this commentary is beginning to hurt the industry.

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“The perception that hotel prices in Dublin are always expensive is definitely unhelpful in terms of domestic trade. In January and February, when there was really good value, people weren’t checking. We can see that the number of Google searches for hotel stays dropped considerably in the first few months of the year in terms of domestic searches. Inevitably, when Taylor Swift is playing, someone will charge €1,000 for a room, but it won’t be us, and it will be all over on the media. Everyone will focus on that and won’t focus on the fact that our average room rate last year was €158. That’s something the industry needs to address, but I’m not sure how we do it.”

Dalata is Ireland’s biggest hotel chain by some distance. Is there still room for growth here?

“We’re putting a new hotel in beside Croke Park [about 200 bedrooms], a Maldron. We’re doing an extension at our Cardiff Lane property, adding 110 rooms there. We’d always look to do an extra hotel or two in Dublin, it’s a growing city. We’d like another hotel in the centre of Galway, we’ve been looking for quite a while but it’s a hard city to get into. Apart from that, we’re done really in Ireland.”

Dalata won’t be a bidder for the Mount Juliet or Slieve Russell golf resorts that are currently for sale. “When I start buying hotels with golf courses, you know it’s over.”

The UK is the near-term target for expansion. By the end of August, Dalata will have 22 hotels in Britain, amounting to about 5,500 bedrooms, he says.

Crowley sees plenty of headroom for expansion. London, where it has four hotels, with another in Shoreditch to open later this year, could be a “very significant growth platform” for Dalata. In Manchester, it’s adding another 200 rooms at its airport hotel, with a new Maldron to open in the city centre, and, he adds, “we’d do another one”.

“We’d be the biggest four-star operator in Manchester as of this year. We like clusters of hotels. If someone joins us and they don’t want to leave Manchester, they can grow [their careers] between properties.”

Dalata last year announced plans for a first hotel in Edinburgh, and Crowley says it would like to get to the point where it has about 2,000 bedrooms in the Scottish capital, but it’s “really difficult” to find properties there. “We’ve only one hotel in Birmingham, we’d like a few there, we’ve only one in Bristol, and we’d like a second one there. We reckon there’s another 4,500-5,000 bedrooms we could do in provincial UK outside the current pipeline.

[ Dalata’s Irish revenues decline since January but ‘modest’ growth recorded in UK ]

“There are a lot of crummy hotels right around the UK that are really struggling. So when you go in with a new product, that’s when you do really well.”

Dalata has also dipped its toes into the continental European market, taking over a former Hard Rock Hotel-branded property (173 bedrooms) in Amsterdam last year and opening in Düsseldorf, dubbed the fashion capital of Germany. The Dalata effect is demonstrated by the fact the Amsterdam property has had “six or seven” nights of full occupancy this year. “Last year, they didn’t have one night full,” he says. “And that hotel is only with us six months.”

Over the longer term, Crowley sees plenty of opportunity for growth across Europe. The group has just hired someone who will be based in Germany to scout for new opportunities.

“We’re looking right around a variety of cities and ones that have a strong mix of corporate or leisure. So if you look at Spain, we would go to Madrid, but we wouldn’t go to Marbella. If we were in Portugal, we’d go to Lisbon, but not to Faro. In Germany, Munich, Cologne, Hamburg, Berlin, are all really attractive cities for us to operate in. In Belgium, Brussels makes sense for us.

“Continental Europe is the growth engine. For now, we’d like to be adding a hotel a year for the next couple of years and then a couple of hotels a year, and you go from there. In reality, the major growth [for the next five years] is going to come from the provincial UK and London. In five years’ time, we’ll still be growing in London, but Europe is then where we’d be growing.”

Crowley says the secret sauce for Dalata’s success to date has been the “people”.

“The hotel business is reasonably simple. The distribution is a bit tricky, but if you’ve got really good, well-trained, well-motivated, happy people, they’ll take care of your customers, and if you’ve got happy customers, that then will lead on to everything else. We are relentless in our focus on people. It’s the investment in the Dalata academy, and it’s the promotions from within – over 500 promotions internally last year. Over 800 went through development courses.”

Innovation is another key element, something that Dalata has used to help fund wage increases for lower-paid staff – essentially paying fewer people more money so that they can make ends meet in their private lives. Crowley cites its housekeeping department as an example of this.

Following a time-in-motion study, Dalata reduced the amount of time spent cleaning rooms at its Irish hotels by 10 per cent on a like-for-like basis. All that while retaining high scores with staff on engagement, with customer satisfaction scores “up marginally”, and with no compromise on the cleaning.

“We did simple things like cordless vacuums, which stops someone bending their back about 28 times a day, and they’re saving time. We introduced a QR code on their trolleys, so if they use their phone they get information as to which rooms have checked out. Previously, they had to knock on the door, wait 15 seconds, knock a second time and wait 10 seconds.

We’ve increased our customer scores in terms of our food, while the quality and the consistency of our food has increased

“We also looked at the type of cleaning. So if you’re a single corporate, the type of clean will be different to a family room. It’s tailoring the cleaning to the customer.”

In its kitchens, most of the cooking is done off-site now and comes in needing only to be heated in high-tech ovens and dressed on the plate. “We’ve increased our customer scores in terms of our food, while the quality and the consistency of our food has increased.”

He says entry pay levels are now 20 per cent higher than two years ago, without the need for redundancies. The efficiencies have helped reduce the need for casual workers and targeted areas where there are “always vacancies”.

That said, customers might be surprised to discover that their meals are essentially par-cooked off-site and reheated in the hotel. “The technology in terms of cooking food has changed completely, and in that environment you get more consistency. And quality has gone up,” he insists, adding that this is common at other Irish hotels and restaurants.

Crowley says steaks and “more complex dishes” are still cooked to order on site, however.

Hailing from Cork, Crowley trained with PwC in Cork before departing for a role with Procter & Gamble in the UK. Through a friend he was approached to join Forte hotels and returned to be financial controller in the Shelbourne in Dublin. “I worked there for three years and really enjoyed it. I did some duty management and hadn’t a clue what I was doing.”

From there, he went to work for Bill Cullen in the motor trade for two years, before being approached by Pat McCann to join Jurys Doyle hotels. McCann later tapped him for a senior role with Dalata in 2012, and he succeeded McCann in the top role in November 2021.

Crowley was heavily involved in the sale of the Jury’s hotel in Ballsbridge to Sean Dunne for an eye-popping €270 million in 2005. With the closing of the sale dragging on, Crowley gave Dunne an 11.30am deadline one Sunday morning to complete the process, after which he would switch off his phone to attend a Cork-Waterford All-Ireland hurling quarter final. “He was a bit surprised, but I think he believed me eventually and we agreed it and I went off to the match and Cork won.”

The Berkeley Court later went for €130 million, also to Dunne, which Crowley accepts was “mad” money. Dunne, of course, never got to develop either. “My theory was just sell it to the highest bidder. It wasn’t my job to work out if they were going to make money out of it or not.”

The ultimatum to Dunne worked – Cork beat Waterford that day and went on to lift the Liam MacCarthy cup, the county’s last All-Ireland. One weekend that wasn’t a disaster.

CV

Name: Dermot Crowley

Job: Chief executive, Dalata Hotel Group

Age: 57

Lives: Leopardstown, Dublin

Family: Married to Jo-Ann Durnin with three children, Darren, Shayna and Ryan

Hobbies: Loves all sport. Played rugby and tennis, but hurling is his “favourite sport to watch”, and he coaches under-age hurling at Kilmacud Crokes in Stillorgan. “As a game, the atmosphere is unique”

Something we might expect: “I am data-driven. Decisions are made on the back of data”

Something that might surprise: “Up to 10 years ago I would have preferred to go to the dentist rather than do public speaking. Would be shaking going up to speak. But I constantly forced myself to do it. And now I’ve no problems with it now”

Leadership style: “I’m really good at shutting off. I’m not on 24/7. I wouldn’t feel the stress of the job. I rely on my team. I spend a lot of time on team dynamics”

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