No-frills hotels net luxurious €15m for Dublin pair
There are no biscuits or teapots for hotel guests in their rooms, but the winning no-frills formula at Travelodge has resulted in a shared €15 million windfall for two Dublin businessmen.
New accounts show hoteliers Richard O’Sullivan from Rathmines and Séamus McGowan from Foxrock this year shared €15 million from their Irish franchise of Travelodge.
The two bought the franchise along with its eight properties in May 2004 and operate them via Smorgs (Ireland) Ltd.
Today the business comprises 12 hotels, with five properties in Dublin and hotels in Belfast, Derry, Galway, Waterford, Limerick and Cork.
Figures lodged by Smorgs (Ireland) Ltd for the year to the end of March 31st last confirm the payment of the €15 million dividend to Smorgs Ltd, a separate company controlled by the two businessmen.
The returns show that 47-year-old accountant Mr O’Sullivan will receive the larger amount through his two-thirds share of Smorgs Ltd.
Mr McGowan is managing director of the business and holds the remaining third of shares. The two have made their fortune from the hotel chain that on its website boasts of keeping costs low by eschewing frills such as teapots and biscuits on the tea and coffee tray in hotel rooms.
Back to black
The figures for Smorgs (Ireland) Ltd show that the firm returned to the black last year, recording post-tax profits of €557,445 following a loss of €2.2 million in 2010.
The firm, which directly employs 125, achieved an operating profit of €20,549 after an operating loss of €1.6 million in 2011 in spite of revenues dropping by 4 per cent.
Remuneration for the two directors last year dropped from €441,086 to €225,740.
In the directors’ report, Mr McGowan and Mr O’Sullivan state they “have implemented strict controls over cost of sales and overheads to ensure that the return to profitability is maintained”.
The report goes on: “All of our Dublin properties have traded ahead of 2011 and there is enough anecdotal evidence as a well as a stronger booking base to indicate that this trend will continue well into 2012.”
Mr McGowan did not return a call for comment yesterday.