Choice pays EUR35m to Gresham for three Ryan hotels

The Gresham Group ended months of speculation yesterday when it confirmed it had sold the loss-making Ryan chain to Choice Hotels Ireland for €35 million.

Choice, which counts Limerick property developer and former rugby international Mr Pat Kelly as its largest shareholder, said it would now focus on building its British presence.

The takeover of the three west of Ireland hotels marks a close to the company's current phase of aggressive growth in the Republic, where it holds the franchise for the Clarion, Quality and Comfort Inn brands, said managing director Mr Frankie Whelehan.

Gresham said the disposal was in line with its strategy of concentrating on four star city centre hotels.

The Ryan hotels - in Galway, Limerick and Killarney - will join Choice's mid-market Quality chain. The acquisition brings to 19 the number of hotels managed by Choice Ireland in the Republic. It operates 42 hotels in Britain, with a further 40 run by Choice Hotels Europe, a shareholder in the Irish firm.

Three new Clarion hotels are being built in Cork, Sligo and Liffey Valley, Dublin. Plans to construct a fourth at Sir John Rogerson's Quay, Dublin, will be announced over coming weeks.

Galway Ryan fetched €11 million, Limerick Ryan €10 million and Killarney Ryan €14 million. Their net book value at the end of last year was €34.64 million. The three posted a €2 million combined loss in the 12 months to the end of 2002.

Gresham chief executive Mr Patrick Coyle said: "The decision to sell the three hotels was taken following a review of the property portfolio last year. These disposals put the group in a strong position to optimise the value of its remaining properties and to develop the group going forward."

The sale leaves Gresham with seven properties of which three are in Ireland - the Gresham, Gresham Royal Marine, Dún Laoghaire, and the Gresham Metropole in Cork. The other properties are in London, Brussels, Amsterdam and Hamburg.

Choice is the Republic's largest operator of hotels by number of properties, but second to Jurys Doyle in room numbers. It is a franchise operation from Choice Hotels International that was started in 1998 by a consortium of Irish hotel owners and operators.

Turnover last year was €20 million. The company employs 1,000.

The move for the Ryan group underscored Choice's determination to become the largest player in the Republic, said Mr Whelehan.

"The addition of these three properties to our portfolio consolidates the Quality hotels group as the dominant Irish mid-market hotel operator," he added.