Westin posts €3.59m loss
THE FIVE-star Westin Hotel on Dublin’s College Green sustained a pre-tax loss of €3.59 million last year despite recording the highest room occupancy levels since the hotel opened.
According to accounts filed with the Companies Office, revenues at Westin Hotels Ireland Ltd increased by 11 per cent from €10.59 million to €11.8 million in the 12 months to the end of December last.
The 163-bedroom hotel, located opposite Trinity College, was built by Johnny Ronan and Richard Barrett’s Treasury Holdings, which still owns the building. According to the directors’ report for Westin Hotels Ireland Ltd: “In 2011, occupancy and average rate improved on the back of three years of decline in the daily rate . . . While occupancy is the highest since the hotel opened, the average rate is way behind the peak year 2007.”
The report also states that while the market has shown signs of recovery, it remains highly price-sensitive and unpredictable, and, most importantly, lagging significantly behind 2007 levels.
In 2010 the hotel firm recorded a pre-tax profit of €19.6 million, but this occurred only after its owners, the US-based Starwood Hotels and Resorts, “forgave” the €24 million it had invested in the business. The hotel chain was owed €21.4 million in loans and €2.5 million in interest by the Dublin hotel, but waived all rights to be repaid in 2010.
The directors state employee numbers have remained relatively stable, declining last year from 114 to 105, made up of 88 operational staff, 12 administrative staff and five sales and marketing staff. Staff costs at the hotel last year increased from €4.8 million to €5.2 million and emoluments to directors increased from €155,872 to €259,844.
The loss last year takes account of non-cash depreciation cost of €457,104. The figures show that, last year, cost of sales increased from €5.8 million to €6.2 million with operating expenses increasing from €8.6 million to €8.8 million. The firm recorded an operating loss of €3.3 million last year, and interest payments totalling €287,008 added to the loss.
Annual lease obligations to Treasury Holdings for 2011 totalled €4.7 million and this followed lease obligations to Treasury totalling €4.6 million in 2010. The lease agreement commenced in 2001 and runs for 25 years. A note states: “Minimum lease payments are paid to an escalating annual repayment schedule ranging from €1.3 million to €5 million.”
However, the figures show that the firm owed €10 million in accruals at the end of December last, with €9.2 million relating to deferred operating lease rentals.
The loss last year resulted in accumulated losses climbing to €15.3 million. The figures show that the firm received a €4.3 million loan from Starwood International Finance Europe Ltd during 2011.
A note attached to the accounts states that Starwood Hotels and Resorts Worldwide “have undertaken to provide the company with financial support to enable it to continue operating and to discharge its obligations to all creditors, both current and future, for a period of at least 12 months”.