Big brands take up space as tax incentives extended

Tax-driven hotel development is attracting the attention of the big international hotel chains, writes Joan Scales

This year should be called the year of the brands in the Irish hotel industry, with names such as Ramada, Crowne Plaza, Park Plaza, Park Inns, Golden Tulip, soon to become household names in Ireland.

The Irish market has been underserved by brands up to now and some of the reasons for the change are the opportunity to join established marketing services, but also a reflection of the growing involvement of property developers in the hotel industry.

"The entry of international brands into the Irish market is very much in parallel with the tax-driven hotel development, as distinct from market driven," says Con Horgan of the Irish-owned Tower Hotel Group. "Most of the actual ownership of hotels in recent years rests with investors and has been driven by an insatiable appetite for tax shelter."

And it was good news for investors this year when the Minster for Finance extended the capital allowances for hotel development again. Planning permissions can still be tendered up to the end of this year with completion by July 31st, 2006.

John Power of the Irish Hotels Federation said they had lobbied for the extension on the completion date as the "rush of planning applications was creating a bottleneck and the building industry would have had us over a barrel. As it is now, most of the planning applications are in. There may be a few more by the end of the year, but it gives the industry a breathing space to complete," he said.

Mr Power said that the split in ownership is a trend that has been happening all over Europe but is only now changing here, but he still feels the change is slow enough. "Property developers need the brands to manage and market their hotels," he went on to say.

On the question of whether the small independent hotels were likely to be absorbed into larger groups, Mr Power said: "It is important to realise that the small independent hotels are very much a part and parcel of traditional Irish tourism and are very good at what they do and bring a uniqueness to the market. They represent the experience of Ireland that people are looking for."

Recent brands to join the Irish market are Marriott, which takes over the management of the Shelbourne Hotel, and Johnstown House Hotel in Enfield, as well as Druids Glen. Westin manage one five-star property for Treasury Holdings. Four Seasons manage the Ballsbridge hotel for a group of investors and it was one of the best performing Four Seasons last year.

Radisson SAS has gone from strength to strength this year with the opening of luxury hotels in Sligo, Belfast and Athlone. Next year they will open a 122-bed Radisson SAS in Cork and two Park Inns in Dundalk and Mulranny. The Dundalk property will also have a golf club.

The Fitzwilliam Hotel Group became franchisees for the Park Plaza brand and will change the name of the Royal Dublin Hotel and the Fitzwilliam Hotel at Belfast airport. They hope to add up to 10 hotels to the Park Plaza brand in the next five years.

Ramada Hotel Group and Crawford Investments announced in September they they intended to invest more the €300 million on 37 hotels in Ireland, over the next three years. The hotels will be a mixture of new builds and changeover of existing hotels to the Ramada brand.

This year we close with almost 2,000 more beds - the national figure now stands at almost 47,000. Some of these new beds came from the likes of the Radisson SAS in Athlone, Sligo and Belfast, Jurys Inn in Parnell Street, McEniff Grand Canal Hotel, Bewleys in Leopardstown, Clarion at Liffey Valley in Dublin, the Quality Hotel in Youghal and the Brehon Hotel in Killarney.

Overseas, Jurys opened two new Jurys Inns in Chelsea and Heathrow. The flagship, however, is the new Jurys Boston Hotel, on the site of the former police headquarters, and is, after only a few months, establishing itself strongly on the Boston market.

The biggest Irish investment overseas was the purchase of the Savoy Hotel Group by the Quinlan Partnership when they beat Saudi Prince Alwaleed for control of the group. The Savoy Group consists of the Savoy, Claridges, Berkeley and Connaught hotels.

Next year, despite the fact that this year has seen very low growth, expect to see some of the following new hotels: Castleknock Hotel Croke Park to be managed by Jurys; Park West Dublin; Kilmeaden, Co Waterford; Foynes Wood, Co Limerick; a five-star in Galway; a 60-bed Four Seasons in Carlingford, Co Louth.

In addition, all over the country hotels will add extra bedrooms and new facilities.