A matter of convention

 

THE FRIDAY INTERVIEW:Dermod Dwyer, executive chairman of the Convention Centre Dublin

IF FIRST impressions are anything to go by, it’s a stunning achievement. Situated along the north bank of the river Liffey, the new Convention Centre Dublin (CCD) looks out across Dublin’s docklands, its distinctive funnel of sparkling glass shooting up from the river’s old mud banks. Located in a district that has become synonymous with planning and economic mismanagement, the opening of the centre in the heart of an area overseen by the Dublin Docklands Development Authority is an achievement. After three years of construction work, and more than 20 years in the planning, the latest addition to the city’s iconography will open its doors on Tuesday.

“This is the first State-owned, public access building to have been built since the foundation of the State,” the convention centre’s executive chairman Dermod Dwyer proudly tells me as we survey the city from the top of the spectacular 55m atrium.

There may be a touch of hyperbole in his statement, but in many respects he’s correct. On August 5th the keys of the building were handed over to the State. The same day the keys were returned to Spencer Dock Convention Centre Dublin Ltd (SDCCD), the company which will run the centre for the next 25 years until it reverts to the ownership of the State.

Since the 1980s, the construction of a purpose-built national convention centre has been part of Government policy. After a series of failed attempts to commission and build the centre, three years ago SDCCD – led by Richard Barrett and Johnny Ronan’s Treasury Holdings – won the contract to design, build and finance the centre. Under the public-private partnership agreement, the State, through the Office of Public Works, will pay the company an annual charge of approximately €47 million a year for the first five years, and just under €24 million for the subsequent 20 years.

The appointment of Treasury Holdings to the public-private partnership deal has raised eyebrows. While the deal was signed during the pre-Nama heights of Ireland’s construction-driven economic boom, the subsequent unravelling of the property bubble has meant the State is now in the less than ideal situation of paying an ongoing fee to a subsidiary of a group that will be transferring almost €1 billion of loans to Nama.

Dwyer is keen to set the record straight on the convention centre’s involvement with Nama. “Only one of the six banks that have financed the centre is a Nama bank, and that’s AIB. This represents only 17 per cent of total loans to the company.”

Furthermore, Dwyer – who has worked with Treasury for more than a decade – is adamant that Treasury are the right people for the job. The company was involved in earlier attempts to construct the centre, initially winning the competition to build the centre in 1998. As such Dwyer believes they have proved their long-term commitment to the project. “Treasury Holdings build buildings to hold. They own the development site, develop it and continue to hold it. They don’t sell them on. There is a huge emphasis on quality in all their buildings.”

Unfortunately for the operators, that reputation for quality came into question in July this year when the convention centre hit the headlines, after it emerged that the company had not built a sewage pumping facility as required by the planning conditions, throwing the opening of the centre into doubt. Dwyer plays down the incident, saying the planning arrangements had been made when a different complex had been envisaged for the site. The company has now been granted an extended temporary licence and the pump will be built within 15 months, he says.

Confident that the centre has left its first stumbling block behind, for Dwyer it is now a case of onwards and upwards. The company has hired a team from the National Exhibition Centre, based in Birmingham, to manage the operation of the facility, including chief executive Nick Waight.

Dwyer has ambitious plans for the centre. While Dublin is currently 27th on the list of preferred cities for international events, Dwyer hopes that the establishment of a purpose-built convention centre will move it into the top league.

Certainly the building itself – built at a cost of €380 million – is impressive. The decision to hire Dublin-born architect Kevin Roche was a winner, turning what could have been a faceless, functional building into an iconic venue. But Dwyer is keen to point out that the convention centre is as much about substance as style. “This building is uniquely designed from the inside out. It is totally end-user driven. We didn’t even see what the design looked like until Kevin Roche was nine months into the job.”

The interior is designed to hold up to 8,000 delegates. Based over six floors, it has 22 meeting rooms, endless foyer space and a massive 2,721sq m carpeted room that can hold more than 3,000 delegates for a conference or up to 2,000 guests for banqueting facilities. A highlight of the building is the 2,000 capacity auditorium, complete with individually air-conditioned seats worth €1,000 apiece, and a lift system which allows articulated trucks to enter the building at ground level, and exit directly onto the stage five floors higher.

At a time when the world has tipped into recession and the global travel industry is struggling, is it all not a bit lavish?

Dwyer is unfazed. “The building is built to last. Together with the Beckett bridge, port tunnel, and the Luas, Dublin is becoming more and more attractive as a conference venue. In addition we offer the complete package. Providing catering for up to 5,000 people is a unique selling point.”

The big question, however, is whether the venture will make a profit. Even with the monthly cushion of almost €4 million from the State, the €380 million price tag means the pressure is on to yield a return. Most convention centres around the world, which are typically owned and run by the State, are loss-making.

Dwyer predicts that the convention centre will be profitable within three years. The company has had a sales team in place since 2007. Already 120 events have been secured, including several high-profile conventions, such as the International Bar Association, which will bring 4,500 delegates in 2012.

It is envisaged that 25 per cent of its business will derive from international conventions, a further 25 per cent will be from British and Irish international conventions, with international and domestic corporates making up the rest.

Dwyer is confident the business tourism area targeted is sheltered from the worst of the slowdown. “Most of our clients are professional groups, which are generally not affected by the recession. These events don’t get cancelled and are planned years in advance. It may be that we have slightly fewer delegates but that will be about it. We are also getting very strong bookings from corporates.”

Dwyer knows all about the economics of the hospitality industry. Having founded and managed a small group of hotels in the early part of his career, as well as the tour operator Gray Line, he founded a tourism and aviation management consultancy before working for Treasury Holdings on the Ritz-Carlton hotel in Powerscourt, where he remains chairman.

He is also a former chairman of the Irish Hotels Federation, and as chairman of the National Tourism Policy Committee in the mid-1980s, he initiated the 1986 plan to double Irish tourism.

As a result, Dwyer is realistic about the challenges facing the industry. “Yes, things are bad out there but we’ve been here before. In 1981, 70 per cent of hotels were loss-making. There were marches on Dáil Éireann.”

On the subject of the Ritz Carlton, which was built at a cost of €200 million and saw a dramatic fall in profits in 2008, Dwyer says that business is “busy” , but that the hotel won’t be making a profit in 2009. “It’s the same problem that’s facing all hotels. Current room prices are unsustainable.”

Dwyer is confident the convention centre will provide a major boost to the struggling Dublin hotel industry by tapping into a fresh tourist market, but for now, his focus is firmly on making the venture a success.

“The world market for international conventions is actually quite small and reputations are very important in that market,” he says. “We have to get it right the first time . . . you don’t get a second chance.”

UNDER THE RADAR

Name: Dermod J Dwyer

Occupation: Executive chairman of the Convention Centre Dublin.

Home: Greystones, Co Wicklow.

Family: Married to Helen. Two children, Caroline and Denis.

Something that may surprise you:He has an MBA from Harvard.

Something that won’t surprise you:The hospitality industry is in his blood. In the mid-1800s, his great-great-grandfather Denis Dwyer, seized an opportunity when his neighbour Charles Bianconi set up a terminus for a horse-drawn carriage service to and from Tipperary. Dwyer, a farmer by profession, built a 24-bedroom hotel near Cashel, one of the county’s first hotels.