International hotel groups are tripping over themselves to increase their presence in Europe and Dublin's new status as a business centre is making it one of the targets of such expansion.
The most recent entrant to the market is the US-based company, Starwood Hotels & Resorts, which has taken a 25-year lease on the Treasury Holdings site in College Street, where a five-star hotel is scheduled to open by Christmas, 2000. The American company will be paying a rent of slightly over £3 million a year for the hotel which will trade under the Westin brand name. Starwood's president in Europe, Mr Bob Cotter, was enthusiastic about Dublin as a business and social centre when announcing the deal with Treasury Holdings last week. He also contended that the five-star market would be shaken up with their arrival in Dublin. Another American chain, the Four Seasons, has also included Dublin in its European expansion. Work on the five-star hotel alongside the RDS in Ballsbridge is well under way and it is due to open before the end of 1999.
The £30 million Radisson SAS St Helen's Hotel, in Booterstown, which opened last month, is being operated by a subsidiary company of the Danish airline, SAS. Starwood, a six-year-old real estate investment trust, has become the world's largest hotel and resort group, giving tax breaks to Americans interested in investing in hotels. Treasury is due to begin redevelopment work on the triangular site between College Street and Westmoreland Street later this month. "Ireland is in the news in a positive way. That is going to create interest in Dublin," Mr Bob Cotter, Starwood's president in Europe, says.
Starwood stepped in where its major competitor, the Hilton Group, left off as the first prospective tenant for the Dublin hotel. However, Hilton is understood to be still looking for a Dublin site. It also controls the Conrad International Group. Another American group apparently interested in gaining a Dublin foothold, Carlson, recently acquired the Regent name from Four Seasons. Company officials have already been in Dublin looking at possible sites. There is also likely to be strong interest in two hotel venues close to the proposed National Conference Centre in the Dublin docklands. The location has already attracted the attention of Starwood which sees the advantage of having a sister hotel at the centre of a new business hub.
"We see no reason why all of our brands should not be in Dublin. You cannot have all of them until you have the first one," Mr Cotter says. Starwood has 655 hotels and resorts in more than 70 countries, employing over 125,000 people. In accommodation terms, that translates into 210,000 guest rooms. Starwood acquired the Westin name - with 105 hotels - along with Sheraton and Caesar's gaming resorts, last January as part of its $14.6 billion takeover of ITT Corporation. It also owns the St Regis, Four Points and W Hotels names, and 70 per cent of the Ciga chain.
In Europe, the company values its assets at $1.3 billion spread across 103 properties. Westin will be marketed in Europe in preference to Sheraton which, the group feels, already has a sufficiently strong presence there. Mr Cotter cites the top rating Westin has received from JD Powers & Associates, the consumer research agency, for the past few years. He envisages the Dublin property as the "type of facility that we have grown to expect in capital cities. It is a good business location, it is a great leisure location. Between everything that is happening in Dublin, we could not be better positioned than being here," Mr Cotter says.
Westin Dublin will join six other city centre luxury properties - the Shelbourne, the Westbury, the Conrad, the Clarence, the Merrion and the Fitzwilliam.
But Starwood is confident that it is nudging into a growing market with a product that will increase competition and set standards. "I have a sense that Dublin is still finding the top end of the market," Mr Cotter says.
He also believes that luxury hotels are secure products in hard times. Five-star hotels were "the first to fill and the last to empty". "In good times they are very profitable, in bad times they are recession-resistant.
"I think the hotel business is 50 per cent management and 50 per cent real estate, and the real estate is location, location, location, and we certainly have that here," he says. Starwood expects its Irish employees in Britain to have a keen interest in working in the Dublin Westin.
The 161-bedroom hotel, which will employ about 150 people, will also have a ballroom, conference centre and a cellar bar with vaulted ceiling, in a space currently occupied by AIB, who will continue to occupy the corner site of College Street and Westmoreland Street.
The site, overlooking Trinity College, originally covered three properties - Pearl Assurance, Scottish Widows and the Workers Union of Ireland.
Westin Dublin will be connected to an international reservation system of four and five-star hotels, developed at a cost of $75 million over the past four years. It has links to over 3,000 travel agencies and reservationists, giving seven-second confirmation of bookings.
Mr Cotter believes that most of the revenues for the hotel will be from weekend trade, when many business people bring their spouses and avail of the social scene.
Mr Michael Wale, area director for the UK and Ireland, says that the average overnight rate will be about £170. The interior will be designed with a distinctive Dublin feel, he adds, giving the example of the Sheraton Grand in Edinburgh, where nine-and-a-half miles of Scottish fabric was used as part of the interior design. "I think it is really important for our international clients, who form up to two-thirds of our business, that they get a strong feel for where they are staying," he says.
