Merrion Hotel in the red with pretax losses of €1.21m
THE MERRION Hotel in Dublin, a haunt of business people and well-heeled tourists, slipped into the red last year with pretax losses of €1.21 million, reversing three years of profit growth.
As hoteliers across the board cut peak-season prices to stimulate demand in the face of poor summer weather, new figures from the firm that operates the five-star hotel show that it struggled last year to stay in the black.
Located opposite Government Buildings on Upper Merrion Street, the hotel ranks among the plushest resting places in the city. Its eateries include Restaurant Patrick Guilbaud, the only Irish restaurant which currently holds two Michelin stars.
The hotel is controlled by Glen Dimplex founder Martin Naughton, former Glen Dimplex shareholder and current ESB chairman Lochlann Quinn and Northern Ireland hotelier Billy Hastings.
Newly-filed accounts for Hotel Merrion Ltd show that turnover in the year to October 2007 rose to €18.53 million from €17.73 million in the previous period.
With administrative expenses increasing by some €2.5 million to €8.75 million, operating losses of some €1.26 million reversed operating profits of €1.56 million a year earlier.
No one was available from the hotel last evening to comment on the results, which reflect business for a period before the economic downturn took hold, or to comment on current trading.
While the Merrion Hotel has faced renewed competition from the newly-refurbished Shelbourne around the corner on St Stephen's Green, the closure last year of the Berkeley Court and Jurys hotels in Ballsbridge is deemed to have presented fresh opportunities for hoteliers in the upper end of the market.
As the dollar weakness makes European travel more expensive for US tourists, the latest inflation figures show that hoteliers and other accommodation providers cut their prices by 0.3 per cent last month.
Whether the Merrion Hotel has been able to avoid that trend is unclear.
The figures from the hotel are largely in keeping with recent research from accountants Horwath Bastow Charleton, which suggests that the profits of hotels throughout Dublin are falling by some 8.2 per cent.
Although occupancy levels are 10 per cent higher than outside the city, the discounting of room rates by Dublin hotels is eating into their profits.
The research suggested that higher-level hotels were currently chasing business from lower categories.