Dalata Records 80% Spike In Profits in H1, Revenues Up 24%
Dalata Hotel Group has seen its profits soar by 80% to €32.7 million in the first six months of 2017, with revenues jumping 24.4%.
In its mid-term results announced this morning, the Irish hotel group's revenues totalled €161.8 million, while group revenue per average room rose by 9.8% to €82.27.
The results revealed that Dalata's Dublin room revenues outperformed the market with growth of 11.2% compared to city growth of 7.2%.
Dalata also announced that it has agreed a new lease deal for a new 300-room Clayton Hotel to be built in Manchester City centre, which is expected to open by the middle of 2020.
The group said that it invested €17.1 million in new builds and extensions to properties during the first half of the year. These works included developments on the Clayton Hotel Charlemont, Maldron Hotel Kevin Street, Maldron Hotel Belfast City and Maldron Hotel Newcastle.
Dalata, which confirmed that construction began in May on the 141 room extension at Clayton Hotel Dublin Airport, added that it has a pipeline of over 1,280 new rooms on target to open in 2018, while €8.6 million was invested in the group’s ongoing refurbishment programme. In addition, €2.4 million was spent on the continuing refurbishment of the three former Clarion hotels, while €1 million was spent on other projects classified as development.
Construction of the new Maldron hotel in Cork and the extensions at Maldron Hotel Parnell Square, Clayton Hotel Ballsbridge and Maldron Hotel Sandyroad will all commence in the final quarter of this year, said the company.
Dalata stated that the weakening of Sterling since the Brexit vote has negatively impacted on the number of UK visitors to the city, however this has been 'more than compensated by an increase in the number of visitors from North America, Europe and other markets'.
As part of the announcement of its results this morning (5 September), a statement from the company said: 'A significant reduction in the value of Sterling would also make Ireland a more expensive destination for UK visitors which in turn could impact on the number of UK residents staying in Irish hotels. UK visitors are an important part of our business in Ireland but it should be noted that 85% of our rooms in Dublin are sold to either domestic consumers or visitors from countries other than the UK. Only 6% of our rooms sold in our Regional Ireland hotels are to UK customers. Additionally, the reduction in UK visitors to Ireland is currently being more than offset by the growth in visitors from other markets such as North America and Europe.'
"The purchases of Maldron Hotel Portlaoise and parts of Clayton Hotel Cardiff Lane were in line with our strategy to purchase the freehold interest of those hotels with unpredictable future rent reviews," said Pat McCann, Dalata Group CEO.
"Both deals are immediately earnings enhancing. I am also very happy that we purchased a significant element of the Clarion Hotel Liffey Valley. This hotel is currently trading very strongly and will benefit further from being rebranded as a Clayton Hotel.
"Apart from Cork, where Clayton Hotel Cork City was negatively impacted by the combination of a rooms refurbishment project in Q1 2017 and teething problems of a rebranding in Q4 2016, we either matched or outperformed the market in all the cities in which we operate. I am very pleased with the way in which the Clayton Hotel Burlington Road has been integrated into the Group and it is performing ahead of our projections for 2017. Our UK portfolio has had a very strong performance to date in 2017 and we significantly outperformed the market in the cities in which we operate.
"We are monitoring the reduction in UK visitors to Ireland since the Brexit vote in 2016. To date, overall visitor numbers remain robust due to growth in other markets. Our strategy of retaining substantial volumes of corporate and tour group business in our hotels makes us less reliant on the UK transient visitor," he added.