The directors of iNua Hospitality have hailed 2023 as a “very successful year for the business” as the Irish hotel group’s revenues continued to recover from the impact of the Covid-19 pandemic and iNua completed a crucial deal to refinance its debts.
After-tax losses at iNua Hospitality Plc – a holding company in the group that operates some eight of iNua’s 20 venues dotted across the Republic – widened to almost €6.3 million last year from €3.9 million, according to accounts filed last week. The increase was driven by one-off costs of more than €3 million associated with the refinancing of the group’s debt pile before the expiry of its existing facilities last summer.
The refinancing, which was completed a year ago, provided by a group of lenders – including AllianceBernstein and Earlsfort Capital Partners – related to group borrowings against its portfolio of eight four- and five-star hotels, including the Radisson Blu Hotel & Spa, Limerick and the Muckross Park Hotel & Spa, Killarney, Co Kerry.
The agreement left iNua – founded by Paul Fitzgerald and Sean O’Driscoll through a management buyout of iNua in early 2020 – with loans totalling €71.8 million at the end of the last year, some €68.7 million of which is repayable in or after 2028, the accounts indicate.
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The group also repaid around €6 million in loan notes upon the completion of the deal last August, according to a note in the 2022 accounts.
In response to queries, Mr O’Driscoll said other fees incurred in relation to the refinance deal included “an exit fee on our previous loan, putting an interest cap in place and the usual legal, financial, and corporate finance costs associated with refinance due diligence”.
Meanwhile, iNua’s operating profits before the one-off €3 million costs linked to the refinancing increased to €3.9 million in 2023 from €2.4 million on revenues of €72.8 million, up 6.7 per cent from 2022. Turnover at the hotel operator plunged to about €22 million in 2020, with the sector largely shuttered due to Covid-related public health restrictions.
Mr O’Driscoll said total occupancy for the eight hotels in the group was 83 per cent last year, up 7.5 percentage points on 2022. He said average room rates increased by 6 per cent in the year, “although growth slowed following the increase of the VAT rate to 13.5 per cent on September 1st, 2023″.
In a report attached to the accounts, the directors of iNua said the 2023 performance was “in line with expectations” and hailed “a very successful year for the business”. “This strong performance was against the backdrop of the hospitality sector having its first return to normalised trade without the impact of Covid restrictions,” they said.
Mr O’Driscoll said the group had maintained momentum in early 2024 with revenues in line with 2023. “Our occupancy for the first half of the year was 81 per cent. However, there is a noticeable decline in bar and restaurant revenues since Easter, as consumers do appear to be pulling back on dining out.”
He said 2024 has been challenging for the wider hospitality sector with the increase in the minimum wage adding to salaries costs along with the increase in VAT. “With consumer sentiment as it is, it has not been possible to pass the VAT on to the customer, so many hospitality businesses are having to absorb this additional cost.”
However, demand for hotels remains strong, he said, and 2024 is expected to be “another strong year” for the group.
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