A leading south Dublin hotel owner has described the five-star hotel market in the capital as "saturated" in its 2005 financial accounts.
The company that owns the Radisson SAS St Helen's Hotel, on Stillorgan Road, made a pretax profit of €12,000 on turnover of €11.68 million in 2005.
The figures compare favourably with a pretax loss of €229,000 on a turnover of €10.55 million in 2004.
The five-star hotel is operated by St Helen's Hotel Ltd, which is owned by property developers Joseph, Michael and Peter Cosgrave, who form the company's board. The company has a management agreement with SAS Hotels of Denmark that runs to August 2013.
SAS Hotels leases the hotel from the three brothers, who are members of a partnership. In 2005, SAS paid rent of €1.65 million to the partnership, according to the accounts. The same rent was paid in 2004. The 35-year lease was signed in April 1998.
The company employed an average of 166 people in 2005 at a cost of €4 million.
The directors, in their report accompanying the accounts, said they were satisfied with the company's performance in 2005, "given the continuing difficult local market conditions".
On the issue of market risk, the directors said: "The company's profitability is highly impacted by market influences and competitive pressures. The present saturation in the five-star hotel market in Dublin and the sensitive tourism market present a very challenging period for the hotel's sales and marketing department."
It is understood the hotel has been very busy in recent months and recorded its strongest month to date in October. However, the ready availability of hotel rooms in Dublin is acting as a restraint on room rate increases.
There has been a large increase in the number of hotel beds in Dublin in recent years as a result of a capital allowances tax scheme introduced by the Government in the 1990s. This allows investors to claim the capital costs of constructing hotels against their income tax, with the allowances available over a seven to eight-year period. It is understood the development of St Helen's involved such a scheme.
The success of the scheme in encouraging the construction of hotels is illustrated by the fact that competitive pressures are restraining hotels from increasing room rates, despite high occupancy rates.
The accounts for St Helen's Hotel Ltd state that Cosgrave Developments, which is controlled by the Cosgrave brothers, owed €40,000 to St Helen's Hotel Ltd at the end of December 2005. The debt arose in the course of normal trading, the accounts said.
