Former Jurys Doyle chief executive Pat McCann claims he had an "out-of-body experience" on the day he opened bids for the former Jurys hotel in Ballsbridge in Dublin, which was sold to Carlow property developer Seán Dunne for a then record price of €275 million.
In a wide-ranging interview with Inside Business, a podcast from The Irish Times, Mr McCann, who now heads the Dalata hotel group, lifted the lid for the first time on the bidding process for the hotel in 2005.
“I was sitting in Ulster Bank in Dame Street when we opened the bids,” he said. “We had about 10 bids. The first to be opened was for €126 million. My target was €150 million. As it turned out, the next bid was actually Sean Dunne’s at €275 million. We had three bids following on from that . . . one at €273 million, one at €271 million and one at €268 million.
“I remember sitting at the table . . . you rarely get an out-of-body experience but it was like I was sitting beside myself looking at myself and saying ‘this is nuts’. That’s the reality of it. That changed everything for us.”
Mr McCann sold the neighbouring Berkeley Court and Jurys hotels in Ballsbridge, on a combined 6.8-acre site, to Mr Dunne for €400 million.
Knightsbridge quarter
Mr Dunne later put forward proposals to turn the area into a Knightsbridge-style quarter, but the global credit crunch and the collapse in the Irish economy in 2008 put paid to those plans.
Mr Dunne went bankrupt and the sites were sold by Ulster Bank in 2015 to a consortium including Joe O’Reilly’s Chartered Land for more than €170 million.
The Berkeley Court has since been demolished to make way for 200 exclusive apartments, while the former Jurys Ballsbridge hotel is being operated on a short-term lease by Mr McCann’s Dalata group.
How long more will it remain open?
“Technically it’s up until 2018 but that may change. It may be longer,” he said.
Does he regret his part in creating the bubble that led to the property crash here?
“Not a pick. Essentially, if I hadn’t done that, shareholders [of Jurys Doyle] would have removed me, and rightly so, because I wouldn’t have been doing the right thing for my shareholders. There was no sense of regret that we were part of this because that’s what somebody wanted to pay.”
Dalata was formed in 2007 with the backing of venture capital group TVC Holdings and Davy private clients.
Near-death experience
But the group, which is now the largest player in the Irish hotel market, had a near-death experience when the Irish economy crashed in 2008.
“We were very close [to going out of business],” he said. “In 2009, the company had an ebitda of €200,000. It was fundamentally the worst year ever.”
Ironically, business turned around when it was approached to operate hotels that had been placed into receivership.
"People think we had great strategic vision in that we started looking at managing hotels where banks were appointing receivers," Mr McCann said. "But that happened by accident. A guy called Pat Hanley with ACC Bank came to us and said they were going to appoint a receiver to a couple of hotels and would we be interested in managing them.
“That sparked a light in our heads. If ACC were doing this, there would be other banks doing it, too. So, by the middle of 2010 we were managing 37 hotels on behalf of banks and receivers. And that saved us because we had management fee income coming in.”
Dalata listed on the stock market in 2014, raising €265 million, and is now the State’s biggest hotel chain, with 41 properties in Ireland and Britain, and more than 8,000 bedrooms. Its revenues last year totalled about €300 million.
