David Kelly is a happy man. He is assessing the newly opened Reserve at the Killashee Hotel in Co Kildare and when we meet, he seems more than satisfied with what he is seeing.
A former B&B, the nine-room Reserve sits across the road from the hotel itself and is aimed at families or other groups looking to take the entire place for their stay, along with its wellness area and the 4.5 acres of grounds surrounding it. It may be on the outskirts of Naas, but it could be the middle of nowhere.
For Kelly (56), the Reserve is just the latest development for FBD Hotels & Resorts in his time as chief executive. The group has just closed on the €55 million purchase of the Grand Hotel in Malahide on Dublin’s northside, adding to its existing portfolio of Killashee, the Castleknock Hotel in Dublin, Faithlegg House in Co Waterford, and the Heritage in Co Laois, as well as two resorts on Spain’s Costa del Sol – La Cala and the Sunset Beach Club.
In charge since the hotels business was spun out from FBD Insurance after the property crash in 2012, Kelly now answers to parent company Farmers Business Developments, which also has a 26 per cent stake in the listed insurer. He makes clear throughout our conversation that while he is lucky to have a patient owner, he is conscious of the need to deliver returns.
The Grand, long owned by the Ryan family, is emblematic of his company’s strategy, which Kelly describes as accumulating “four star, superior assets with a broad base of business”. Most of the FBD portfolio have multiple revenue streams beyond just selling rooms, be it golf, spas or conferences.
[ FBD Hotels to buy Malahide’s Grand Hotel in €55m dealOpens in new window ]
“It’s a very established hotel, a very established brand, and quite a profitable hotel,” he says of the Grand. It’s in an “excellent location, 8km from Dublin Airport, with transport into the city centre and also delivers Malahide Castle, which is going from strength to strength, and [it is] also in a quite affluent part of Dublin, where we feel there’s a lot of opportunity.”
“That’s only going to go one way, and that’s grow. It has access to golf as well. We know the golf industry, so that’s a plus as well. We think we can exploit that for sure,” he adds.
Kelly didn’t have it all his own way when bidding for the Grand. At €55 million, the price was a little above the estimated asking price for the property after a competitive sales process. FBD was one of three final bidders, including a US firm attracted by the hotel’s proximity to high-end golf clubs.
The sale price may seem expensive but Kelly is adamant that, unlike some hotel buyers, FBD is not in the business of trophy assets. He has to deliver a profit for his investors. That inevitably will mean looking at ways to monetise any hotel the company purchases.
Part of the Grand’s five-acre site sits within a residential planning area – something Kelly appears acutely aware of – although he is adamant it’s “not our intention” to sell off any of the site for housing.
Instead, he points to possibly adding a spa, as well as investing in the leisure centre – both moves that would likely be welcome in an area like Malahide.
“We’re going to put our own stamp on it. We’re going to refresh the brand in our own way and try to broaden the business there, but we want to retain the old charm and the old brand to it as well.
“It’s not going to become a sterile hotel. It’s going to retain its character, albeit maybe with a little bit more modern twist.”
The Grand may be FBD’s latest hotel, but is unlikely to be its last. There is a lot of movement in the hotel business at present.
The sector recorded about €890 million worth of deals last year, according to CBRE, the estate agent. That was the busiest year for hotel sales in Ireland since the infamous days of 2006 and the Celtic Tiger madness. CBRE is forecasting another €800 million worth of deals for 2025.
“In 2024, we made profits of about €28 million,” Kelly says. “We now have assets of €400 million and when the Grand is added on, profits will be about €32 to €33 million. It would be nice to get to the half a billion mark [in assets] and maybe getting up to €40 million [of profit] per year,” he says.
Still, the group won’t be “flippant,” he adds. “There is capacity on our balance sheet to grow even further, but again, it would have to be the right opportunity.
“We looked at a lot before we bought this one, we looked at a lot of others, and didn’t proceed for different reasons. It can be hard enough to get what we want.”
Any deal that might be done won’t necessarily be in Ireland. FBD has four decades of experience on Spain’s Costa del Sol and Kelly sounds prepared to utilise that knowledge.
[ From the archive: FBD Property & Leisure in Malaga development planOpens in new window ]
“We’re keeping an eye here and in Spain as well because we’ve been quite successful. We know that market quite well. We’ve very good people there. We know how it works, and we’ve been quite successful.”
Spain has always been a popular getaway for people from the colder parts of Europe, not least Ireland. Kelly says that, in more recent years, there has been an influx of travellers from further west, with the number of Canadians and Americans heading across the Atlantic for their winter sun at FBD’s two hotels there increasing substantially.
I’m just back from Malaga. My flight was €460 because it was midterm break. I’d gone a week earlier and it was €180. That’s supply and demand. I think the hotel industry sometimes gets a bad rap when it comes to that sort of thing
— David Kelly
Part of that was down to improvements in air links, to the point that Canadians are now the biggest market for the Sunset Beach resort in winter, but Kelly points to growing numbers of Americans coming too. For Canadians especially, he sees the “displacement” of many who would traditionally have flown to Florida for their winter sun, but are perhaps less willing to do so now in the Trump era.
One bugbear of the Irish business compared to Spain is the claims culture that seems to permeate Ireland in a way it doesn’t on the Continent. As an example, Kelly compares the 600-room Sunset Beach Club in Spain which he says had one claim made against it last year. Killashee meanwhile, with 141 rooms, faced about 20.
“In Ireland, we’re paying about €1,000 per room for liability and property cover: in Spain it’s about €300. And it’s all down to claims, even with a high excess. It seems to be creeping back up, we’re seeing more claims in the last 12 months,” he notes.
Hotels in Ireland have been the subject of a fair bit of controversy in recent years – be it reports of extortionate pricing around big events or the slew of newly constructed offerings, mostly in central Dublin, the sector has rarely been out of the news.
Kelly sees little need for more hotel rooms but he is happy to defend his industry when it comes to prices.
“I’d be a supporter of ‘we’re fine as we are',” he says. “I know there have been calls [for more rooms] and that might be fine if a big international conference hits Dublin for a week and you need 10,000 beds or whatever. But I’m old enough to remember the Celtic Tiger and the days when only Las Vegas and Dubai were building more hotel rooms than Ireland.”
The message is clear: let’s not get ahead of ourselves.
On reports of the industry gouging customers, he warns against getting caught up in the shock story of the day.
“The nights of the Taylor Swift concerts, we could have sold out Castleknock 10 times over, but those occasions are rare. Our average rate in Ireland last year was flat. People will pay for value and customer experience but there’s a limit to what they will take.”
[ Top Ryder Cup official warns hotels on price gouging ahead of 2027 tournamentOpens in new window ]
Still, he is quick to make clear that he is a businessman running a business.
“Look, I’m just back from Malaga. My flight was €460 because it was midterm break. I’d gone a week earlier and it was €180. That’s supply and demand. I think the hotel industry sometimes gets a bad rap when it comes to that sort of thing.”
The hotel sector may get bashed over its prices, but it seems clear that Kelly is focused squarely on costs.
The sector has been vocal in recent months on the problems around higher costs for the industry. Just last week, the Irish Tourism Industry Confederation lobby group renewed its call for the Government to move more quickly on reducing VAT back to 9 per cent from 13.5 per cent for restaurants, amid a relatively slow start to the year for tourism.
We did try to reduce towel cleaning at one of our hotels but got huge pushback. Everyone is getting better at sustainability. But if you’re paying for a night away with your wife or your partner, you don’t want to be thinking about these things
— David Kelly
Kelly doesn’t play down the impact on his business but acknowledges that the company has the scale to absorb these extra payments with relative ease.
“Our payroll costs have gone up about 30 per cent in about two and a half years because of minimum wage changes and sick pay, for example. We’re taking on a full-time person to look after [pension] auto-enrolment for all our people, and you have the compliance bit of that. Over the same period, Spain’s average payroll has gone up about 9 per cent.
“We try to keep our [main courses] in all our hotels in Ireland below €30 and have about three or four dishes below €25, so the [9 per cent rate] gives you a little bit of scope to try to retain that going forward.”
While he supports minimum wage increases, Kelly points to the initial 1.5 per cent auto-enrolment contribution required from employers, as well as tighter rules on sick pay, among other costs which, in his eyes, have happened quite quickly.
[ Irish hotel industry issues warning amid slower bookings and rising costsOpens in new window ]
“I think that’s the difficulty. Would it be better if it was over a more reasonable time?”
That sense of moving goalposts is also there when it comes to environmental rules. While the likes of FBD Hotels will have to comply with the EU’s Corporate Sustainability Reporting Directive, that is now being scaled back and it is not clear what parts will apply to the hotels industry. Having a strong stance on sustainability has been important for business customers, Kelly says, although less so for personal travellers.
“We did try to reduce towel cleaning at one of our hotels but got huge pushback. Someone paying €250 for a night’s bed and breakfast, they want their towels. They want their toiletries. Everyone is getting better at sustainability. But if you’re paying for a night away with your wife or your partner, you don’t want to be thinking about these things,” he says.
It’s an opinion that might be unpopular these days, but it rings true and speaks to the inherent issue in the hospitality industry. Customers expect things to be perfect in a hotel, whereas those same people may tolerate a tired old office every day at work.
It’s a challenge for any business in the sector, and one that Kelly is acutely aware of.
“If you don’t invest in your hotel assets, your dead. At the core of everything we do is the guest experience and if you get the guest experience right, usually that’ll result in profits and having a sustainable business.”
After 13 years in the top job, and having negotiated a crisis like the pandemic when, as with most CEOs, he had to focus almost entirely on preserving cash for the best part of two years, Kelly could be forgiven for wanting to spend more time with his family and on his hobbies – which include horse racing and the wider bloodstock industry. He has “a couple of mares” at Barroda Stud in Newbridge, while his racehorses are stabled with trainer Ken Condon on the Curragh.
Still, he has little interest in moving on.
“I don’t see myself going for a long time, as long as I keep enjoying it every day. If it ever became a slog or something, then I’d be saying – that’s not for me. But sure, it’s far from that.”
CV
Name: David Kelly.
Job: Chief executive, FBD Hotels & Resorts.
Age: 56.
Why is he in the news? His firm has just completed its take over of the Grand Hotel in Malahide, adding a seventh hotel to its portfolio.
Family: Married to Lorraine, he has two children and four stepchildren.
Lives: From Athy, Co Kildare, he lives in Limerick.
Something we might expect: He travels widely and is always on the look out for ways to improve his own business when on the road. “I say to our guys, if we’re not doing something this good, copy it.”
Something that might surprise: One of his big interests outside work is horses and, in particular, bloodstock. “I’ve always had a huge interest in the breeding of horses. Give me a [sales] catalogue any day before a book.”
