The Government has signalled its support for the sell-off the Great Southern Hotel group by the State-owned Dublin Airport Authority in the face of opposition from some local politicians and union representatives.
Despite strong opposition to the sale from independent TD Jackie Healy Rae, who represents Kerry South - where two of the hotels are located - the Taoiseach and the Minister for Arts, Culture and Tourism, John O'Donoghue, who shares the constituency did not voice opposition to the sale plan.
In the Dail the Taoiseach said "an orderly sale" of the Great Southern Hotel group provided the best opportunity for the chain to reach its full potential. Mr O'Donoghue said he had opposed the sale for many years, but he had been presented with a fait accompli.
Speaking on radio in Kerry he said there was "a certain inevitability" about the sale of the group, given its financial position. But he said he was disappointed. He had approached his colleague Mr Cullen a number of times and had resisted the sale over a period of years. The decision to sell was at board level. "I did everything to retain them in State ownership," he said.
Speaking in Dublin Transport Minister Martin Cullen said he wanted the hotels to remain in business. "We would all have an important attachment to the group because of the contribution they have made over the years." He pointed out that a final decision on the sale would still have to go before the Government.
Asked would the hotel in Parknasilla - where the Taoiseach frequently holidays - be kept open this summer, he replied: "Well the board have actually stated quite clearly there is no intention to shut down any aspects of the group, in fact they want to make sure that the group keeps trading over the current year, until we get to a situation, so hopefully whatever the outcome is we won't have any closures other than perhaps refurbishment that will be done."
Mr Cullen said that the nine hotels may need €80 million of capital investment in the years ahead. The hotels are expected to make losses of €8 million in 2006. Several hotel groups are likely to express interest, although they would be expected to cut overheads at the group dramatically after taking control.
The directors of the Dublin Airport Authority (DAA), which ultimately owns the hotels, have been worried about the financial position of the group for several months.
Some directors were concerned about leaving themselves open to allegations of reckless trading if the problems at the hotel group were not addressed.
The chairman of the Dublin Airport Authority, Gary McGann, has spoken on numerous occasions about exiting from loss- making businesses. It is understood intense lobbying of Ministers by the DAA has taken place over recent months on the issue.
Reaction in Killarney where 120 people are employed in the 152-year-old Great Southern Hotel was one of shock.
Yesterday at the hotel, head porter Mossie Horgan, chairman of the Killarney branch of SIPTU and a member of the regional executive council of the union, said staff were concerned at this week's announcement.
He said the Dublin Airport Authority had not contacted the union and most of the staff had heard nothing about it until it appeared in the media on Tuesday evening, he said.
The hotels were viable "in State ownership", Mr Horgan said.
The hotel in Killarney had faced the prospect of being sold twice in the past, he said "We are still holding out hope the Cabinet won't approve this. It hasn't been decided by Cabinet yet," Mr Horgan said.
Hotel general manager Conor Hennigan said "this has all come as a little bit of a shock and staff are emotional".
Labour TD Breda Moynihan- Cronin said some €125 million had been spent by the Government on new hotels in the form of tax breaks, yet there was an unwillingness to invest a fraction of that to save the State asset of the Great Southern group.
Selling the hotels would undermine standards and conditions for other hotel workers, she said.
