Dalata hits record €500m revenue in 2022 as it continues recovery from Covid

Hotel group Dalata hit €500 million in revenues for the first time in 2022 as the company opened seven new hotels and continued to pursue its growth strategy in the wake of the Covid-19 pandemic.

Revenue from hotel operations was €515.7 million for the year, up 20 per cent on pre-pandemic figures in 2019, while adjusted earnings before interest, tax, depreciation and amortisation (ebitda) were €183.4 million – more than 10 per cent higher year on year.

Average room rate rose to €134.80, up from €113.14 in 2019. However, occupancy rates still trail behind pre-pandemic levels, at 75.8 per cent, compared to 82.6 per cent in 2019.

Looking ahead to 2023, the group said it was “cautiously optimistic”, with like-for-like revenue per room expected to be 17 per cent up on 2019 levels in Dublin, 54 per cent higher elsewhere in Ireland, and 27 per cent higher in the UK. The disparity with the revenue per room in the regional Ireland hotels and that of Dublin properties has been previously attributed to the State’s use of hotels to house refugees.

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Asked whether there remains any public goodwill towards the sector domestically, given the well-publicised criticism levelled at hotel operators last summer over room prices and availability, group chief executive Dermot Crowley said: “I think in a lot of cases it’s not fair. When people look at the pricing, while I can’t comment on the prices of other hotels, if I look at our average room rate last year in Dublin for that late-August period, it was €156.

“That is not price gouging, that is not excessive pricing,” he said, adding that there was a degree of frustration over media coverage of the issue.

He said: “We get thousands of customer reviews every year. Pricing is not coming up with our international customers. It just does not come up as an issue.”

Mr Crowley said the group had not experienced a decline in international bookings for this year but “we’ll have to wait and see where domestic demand is because you would be worried about the inflation impact on people’s ability to spend”.

The group had a total of 50 hotels by the end of 2022, with the addition of the Clayton Hotel Glasgow City in October. The year also saw Dalata open its first hotel in continental Europe, the Clayton Hotel Düsseldorf, with almost 11,000 rooms in Ireland, the UK and Germany.

Revenue per available room was 14 per cent higher at €106.39, with the final quarter of the year showing strong growth on pre-Covid figures. Profit after tax was €96.7 million, almost a quarter higher than 2019 figures. The hotel group said it planned to reintroduce dividends, starting with an interim dividend at its first-half results for 2023.

Mr Crowley said he was pleased with the group’s recovery and performance. “We have emerged from the pandemic and its after-effects with a business that has grown in scale and ambition,” he said.

“When I assumed the role of CEO in November 2021, I positioned people, customer focus, growth, sustainability and innovation at the core of my strategic priorities. I wanted Dalata to retain the elements which have made it successful while responding to the new realities facing our industry, the after-effects of the pandemic and the current geopolitical events in Europe. I believe Dalata can respond effectively to the challenges faced by our industry utilising these strategic pillars to optimise our product offering, streamline our processes, drive innovation while maintaining a healthy bottom line and to manage and grow our business responsibly and sustainably.”

On the group’s cost base against the current inflationary backdrop, he said Dalata has hedged against the worst effects of elevated energy prices by forward-buying its energy for 85 per cent of its projected consumption for the year.

“This gives us some certainty,” Mr Crowley said, though he cautioned the price was still about 2.7 times higher than in 2019. He said a renewed focus on sustainability and energy efficiency across the group had seen Dalata cut its overall energy consumption by 13 per cent in the past year compared to 2019, “so that’s helped us with the cost as well as the sustainability drive.”

He also welcomed the recent extension of the 9 per cent VAT rate for the hospitality industry.

Mr Crowley said Dalata was well set to capitalise on the opportunities ahead.

“We continue our ambitious UK expansion plans with the recent purchase of Maldron Hotel Finsbury Park, London, due to open in summer 2023, to be closely followed by our Maldron Hotel Shoreditch, London,” he said. “As we look ahead, Dalata’s robust balance sheet, financial resources, pipeline of talented people and excellent reputation position us strongly for further growth.”

The group pointed to positive indicators of demand in Ireland and the UK, including the resumption of conferences and events and the return of international travellers. “We continue to monitor the macroeconomic backdrop and any potential for a slowdown, most notably in domestic leisure demand,” the group said. “However, we are not seeing any such indicators in our trade levels to date.”