The days when investors and developers could pick up Irish hotels at “bargain basement prices” are coming to an end, the boss of the country’s biggest hotel chain has warned.
A year after it set off on a stock market flotation-backed acquisition spree, Dalata chief executive, Pat McCann, has claimed there are now around 100 Irish hotels left in some form of insolvency. “Whether we’ll take advantage of that or not is another matter,” he said, “but I reckon that by the end of this year the hotel asset values we have seen for a number of years will not be around in most cases.”
Announcing an end of year profit rise of 54 per cent Dalata — currently operating 46 hotels with over 7,400 rooms — made €8.2m (£5.8m) last year, excluding the impact of its acquisitions.
McCann said his company had now allocated all it proceeds from last year’s flotation which raised €256m (£181m) but, he added, the group would remain flexible in terms of making additional acquisitions.
Dalata has only just completed the €455m (£321m) acquisition of nine hotels within the Moran Bewley Group. It also bought three other hotels last year for a total of €35m and, in December, paid a total of €42m (£29.7m) for a trio of regional Irish hotels.
The company — which is contemplating new builds in Dublin and is actively pursuing at least one development site — has also just bought the 170-bedroom Holiday Inn in Belfast for €26m (£18.5m). And McCann said the acquisition of another hotel it already manages might be sealed within weeks, funded from the company’s 2015 €25m (£17.6) acquisitions war chest.
“The board will now sit down and decide our future strategy,” added McCann. “But the real focus for us is to make sure that the properties we’ve bought are performing to their highest peak. It’s much too early to contemplate what we might or mightn’t do.”
Founded by McCann in 2007, with investments from TVC Holdings plc and clients of Davy Property Holdings, Dalata has grown to become the largest hotel operator in Ireland. Fifteen of its hotels are owned by Dalata, 12 operated under lease agreements and 19 operated under management deals. It operates under the Maldron Hotel brand across Ireland and the UK.
