Shares up at Dalata despite tumbling revenues

Breakfasts in a bag and disposable menus could greet guests in Ireland’s biggest hotel chain if it re-opens to the public with Covid-19 restrictions still in place.

Earnings at Dalata Hotel Group fell almost 25 per cent in the first three months of this year to €17.7 million from 23 million during the opening quarter of 2019, its chairman, John Hennessy, confirmed on Wednesday.

Speaking after Dalata held its annual general meeting via conference call, chief executive, Pat McCann said that the company, owner of the Maldron and Clayton hotels in Ireland and Britain, was preparing for limited lifting of coronavirus restrictions in coming months.

Fifteen of its 44 properties are open for healthcare workers, asylum seekers and homeless people.

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Restrictions

Mr McCann said Dalata would apply what it has learned in these hotels to all its premises should they re-open with restrictions in place.

“For example, we have developed with our suppliers a breakfast in a bag that’s delivered to your room, there’s no need to go the restaurant, there’s no collection of trays or anything that could spread infection,” he said.

The breakfast includes orange juice, croissant, bread, fruit, yoghurt and cereal.

Mr McCann added that the company opens restaurants in hotels where social distancing rules allow this. It uses disposable menus on the tables, while it has removed the salt, pepper and sugar.

Dalata hopes domestic travel restrictions ease first with foreign travel following. However, Mr McCann said that he could only guess when this would happen.

“We need an economy to support our health service, but we have to bear in mind that health trumps everything else,” he said.

Dalata has already confirmed that it has €140 million to €150 million in cash, enough to see it through to the end of this year.

That does not include €65 million that the company received from selling its Clayton Charlemont Hotel in Dublin to Germany's Deka Immobilien and leasing it back.

Mr Hennessy said that would help carry the group into next year should it not earn any revenues from its businesses in coming months. However, that is a worst-case scenario, as Dalata expects some income from its business.

“Twenty-twenty is a year of survival, 2021 will be about rebuilding and in 2022 we should see things beginning to operate pretty normally,” Mr McCann predicted.

Covid-19 knocked 24.3 per cent off the revenues Dalata earned from its rooms in Dublin, 14 per cent around the rest of Ireland and 18 per cent in Britain.

“These figures include two months of normal trading before the effects of the global pandemic were first felt in our business,” Mr Hennessy said.

Results

He warned that results for the period after March 31st would reflect that Dalata’s hotels were temporarily closed or operating at significantly reduced levels.

Mr Hennessy added that the outlook for the business remained uncertain as a result. Dalata has laid off 3,500 workers while the crisis lasts.

Addressing shareholders, Mr McCann stressed that Dalata had enough cash to survive a long lockdown. “Overall, the company is in pretty good shape,” he said.

The group’s shares rose as much as 10 per cent yesterday and were 8.15 per cent ahead at €2.92 late on Wednesday.