The Dublin Airport Authority (DAA) is to recommend to Government the sale of the Great Southern Hotel chain after putting a €95 million valuation on the group during board discussions this week.
The current valuation of the hotels would be regarded as conservative by many, although last year Aer Rianta, the precursor of the DAA, sold the Torc Hotel in Killarney for €3.8 million.
It is understood the chief executive of the hotel group, John O'Mahony, delivered a presentation this week to the board outlining three potential options for the nine-strong group. One was to leave the group intact, the second was to sell some of the loss-making properties and expand the profitable ones, and the third was to opt for full sale.
It is believed there is growing support in the Great Southern Hotel group for the part-sale option, although Mr O'Mahony's paper simply outlined the possible courses of action.
However, after a long discussion it is understood the board agreed to make submissions to the Departments of Finance and Transport on the chain's future.
These submissions are expected to urge the Government to sell the properties, although the decision is ultimately one for the Government as shareholder. A spokesman for the DAA declined to comment on this week's board discussions and said they were an internal matter.
DAA chief executive Gary McGann has spoken in public on two occasions about the loss-making performance of the hotel chain. In 2004, the chain made a loss of €2.2 million. Its turnover rose to €44.9 million from €44.1 million the year before.
It is understood that Mr McGann spoke out strongly against the idea of spending more money on the hotels during the board discussions.
Mr McGann was supported by several other directors who said there was little point in opting for a "piecemeal solution". Some directors are concerned that the hotels could become insolvent if something is not done to stem the losses in future years.
Mr McGann has said previously that the cost base of the hotels is out of line with other hotel groups. He has also spoken about a lack of hotel expertise within the group.
In the DAA's annual report, chief executive Oliver Cussen made the authority's position clear. "The status quo for the Great Southern Hotels is not tenable." However, senior ministers are unlikely to back a sale plan. The Minister for Arts, Sports and Tourism John O'Donoghue has already strongly voiced his opposition to such an idea.
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