The State-owned Great Southern Hotels chain is to be sold off as a "going concern" as group losses climb to a record €6 million. The Government was informed yesterday of the decision by the Dublin Airport Authority (DAA), writes Emmet Oliver.
It is understood losses at the group's nine hotels reached €6 million at the end of December 2005.
The hotels are valued at €100 million in total, but they are likely to be sold for significantly more. Some of the hotels are trading profitably, for example Dublin airport, but others are loss-making, including the property at Rosslare.
A DAA statement said advisers were to be hired to assist with the disposal of its hotel assets. Staff and trade unions are expected to be briefed in the next few days.
About 660 staff are employed at the group and there is likely to be some opposition to the plan. Siptu general secretary Joe O'Flynn last night said he was outraged at the decision and he was hoping to meet Minister for Transport Martin Cullen next week. Fine Gael transport spokeswoman Olivia Mitchell welcomed the announcement.
Aer Rianta, now the DAA, has owned the hotels for over a decade. They were previously owned by CIÉ. The DAA claims labour costs at the hotel chain are out of line with comparable groups.
It says payroll costs account for about 34 per cent of turnover at most hotel companies but represent 46 per cent of turnover at Great Southern. It is understood any sale plan will have to go to Cabinet for final approval. Minister for Tourism John O'Donoghue is a long-time opponent of selling the hotels. Two of the hotels are in Co Kerry - at Killarney and Parknasilla near Sneem.
Senior sources said not all political opposition had been removed but most Ministers would be happy for the sale to go ahead when the issue came before Cabinet. The sale proceeds will remain within DAA. It has plans to spend €1.2 billion over the next decade on infrastructure, including a new runway. The pension fund linked to the authority may also need fresh funding.
Several of the properties require considerable refurbishment and many of them have low occupancy rates during the winter. DAA chairman Gary McGann has spoken on several occasions about exiting from loss-making businesses. However, Taoiseach Bertie Ahern has been a strong supporter of the chain and holidays regularly at the Parknasilla property.