Fitzpatrick’s New York hotels set to increase operating profits by 10%

Irish hotelier John Fitzpatrick expects his two hotels in New York to grow their operating profit by up to 10 per cent in the current financial year on foot of strong business from the UK and a continued recovery in the corporate market.

This follows a record trading year for the company in the year to the end of September 2012. Accounts just filed for Fitzpatrick Hotels Ltd, which have been provided to The Irish Times, show its pretax profit rose by 16 per cent to $3.16 million (€2.36 million) while turnover was up 3.6 per cent to $23.8 million.

Mr Fitzpatrick said this strong performance was due to an increase of $1.86 million in room revenue from the UK market. This helped boost the hotel group’s average room occupancy rate to 86 per cent for the year from 82 per cent previously. With about five weeks left in its current financial year, Mr Fitzpatrick expects his hotels – the Manhattan and the Grand Central – to increase turnover by 5 or 6 per cent, which would result in revenues topping $25 million.

“The outlook for the rest of 2013 is good,” Mr Fitzpatrick said. “It’s all about adding to the average room rate now, there’s not much more we can do with occupancy.”

Increased competition
Mr Fitzpatrick said the average room rate this year will be $287 versus $285 in 2012.

This performance comes against a backdrop of increased competition in New York, with an additional 20 hotels and 4,000 bedrooms slated to open this year.

The city remains a popular destination, with a record 52 million people visiting New York in 2012.

Mr Fitzpatrick said there were “some signs of recovery” in the number of Irish visitors to his hotels as the economy here recovers from the crash in 2008. “A lot of Irish families seemed to be taking holidays in New York this summer,” he said.

The accounts show the company paid $820,000 in corporate taxes last year, up from $656,000 in the previous 12 months.

This left it with an after-tax profit for the year of $2.33 million, up from just under $2.1 million previously.

The company paid a dividend of $240,000 to Mr Fitzpatrick last year, the same level as in the previous 12 months.

Directors’ fees and remuneration rose marginally to $1.17 million while the payroll costs for its 154 staff increased by 7.6 per cent to $10.4 million. Mr Fitzpatrick said this was due largely to a wage deal agreed with housekeeping staff.

Fitzpatrick Hotels had $37.4 million in shareholders ’funds at the end of September 2012, up $2.1 million on the previous period. Its net debt reduced during the year to $42.7 million from $45.4 million previously.