The sale of the Great Southern Hotel chain has been proposed in various plans and studies going back over seven years. In April 1999, the then-chief executive of Aer Rianta, John Burke, said selling the hotels was right for Aer Rianta and the Great Southern group itself.
"A sale is in the best interests of both companies, but it will be done on a consultative basis," he said. He was speaking after a sale plan was recommended in a report by IBI, Lehman Brothers and Arthur Andersen. It never happened.
So this time around is a sale actually going to take place? There is no shortage of determination of the part of the Dublin Airport Authority (DAA). Its chairman Gary McGann, a former Aer Lingus chief executive, is well-versed in the kind of political fudges that have been imposed on the airport over the years.
At Smurfit Mr McGann is known for his quick decision-making, but he may yet have to wait some time before the sale of the nine hotels goes ahead.
Sales plans for Aer Lingus have been on the political agenda since the 1990s, while discussions on a new terminal for Dublin Airport have been ongoing for at least five years.
Yesterday, it was made clear the Government had been informed of the DAA's decision to press ahead with a sale plan, but any actual deal will still require Cabinet approval. That means political considerations remain a key factor in the outcome. The position of Minister for Arts, Sport and Tourism, John O'Donoghue, is well established. He is opposed to the sale.
The inclusion in yesterday's statement of the phrase "going concern" means the hotels are being sold as businesses, not as property plays. But this means the price offered by buyers could be discounted.
Buyers generally want as much freedom as possible when purchasing such a large number of similar assets.
A question also surrounds the readiness of buyers to take on the high staff costs present in Great Southern properties. Pay and conditions at the hotels are high by the standards of the industry.
For example, in 2004, payroll and related costs (€20.7 million) accounted for almost half the turnover of the group.
There was some surprise yesterday that the DAA did not pursue the option of selling the loss-making properties, but retaining the others. It is understood hotels at Dublin Airport and Eyre Square are trading profitably, but others like Rosslare are losing substantial amounts.
However, many DAA board members believe the company has no strategic reason for being in the hotel business anymore.
The level of competition facing the chain is clear to anyone visiting Dublin Airport. Just across the road from the Great Southern property is a Clarion Hotel, which is currently undergoing a major overhaul. There is also a Crowne Plaza hotel close by and the Regency.
Union opposition to any sale is likely to be strong. Last night Siptu said the issue could affect the social partnership talks, unless there was proper consultation with Government and the DAA.
