AS OF this morning Dr Paddy Galvin will no longer be chief executive of Waterford Crystal and will instead take on the Doyle hotel group. His appointment, which was finally agreed last weekend, is part of package that brings to an end a one and half year stand off between the Doyle family members, owners of the State's largest privately owned hotel chain. On June 15th, 1994, the Doyle Hotel Group issued a statement. It said "Mr David Doyle has announced his resignation as managing director of the Doyle Hotel Group in order to concentrate full time on his personal property investment and business interests."

The surprise statement said David's sister, Mrs Bernadette Gallagher, would act as managing director "pending the appointment in the near future of a Group Chief Executive" who, the company clarified would be recruited from outside.

Last Sunday, the group issued a statement with the remarkable news that David Doyle had been re appointed to his old job with effect from March 31 st, that Mrs Gallagher had been appointed to the nonexecutive position of deputy chairman and that Dr Galvin had been made non executive chairman.

While David Doyle is back at the helm of the hotel group founded by his late father, PV Doyle, this time things are different. The company has a strong independent chairman in the form of Dr Galvin, and at least two other non executive directors are due to be appointed

It was generally felt in the industry that David and the family had a falling out over his policy of heavy investment in the existing hotel properties. He spent about £1.5 million on a new conference centre for the Berkeley Court, another £1.2 million to give the Montrose Hotel a new facade and £1 million for a new bar in the Burlington Hotel.

The re investment of profits was the correct strategy for the long term but it was achieved at some pain to the family shareholders whose dividends were necessarily modest.

However sources close to the company dispute this interpretation. Whatever the precise reason for the falling out, it is clear that some members of the family felt that Mr Doyle was not keeping them as fully involved and informed as they felt they should be as board members.

For example, industry sources say, David Doyle fashioned a plan to bring the Marriott brand name into Ireland. The sources believe that the Burlington would have become the Marriott Burlington while the Montrose, Tara Towers and Skylon would trade as Marriott Courtyard hotels. Only the Berkeley Court and the Westbury would have remained as they were. This was a sensitive issue for the family.

David Doyle resigned, partly in frustration over the family rows. His sister, Mrs Gallagher, who had been involved with the sales and marketing side of the group, took over as chief executive.

Mrs Gallagher, who has three children, did not expect to remain chief executive for long, but the hunt for an outsider proved to be fruitless. Part of the problem may have been that hotel professionals were aware of the difficult family situation.

David Doyle had also raised the issue of going public while he was chief executive. Other family members resisted this but in recent times some may have been won over to the argument

Going public would raise funds for expansion and of no little importance, family members would have a market for their shares.

However, the group denies that a move to the stock market is imminent, although it does not rule it out for the future.

Some elements of the new deal are slowly emerging. Mr Doyle is returning on a five year contract and will inherit a strong management team that was established by Mrs Gallagher.

Any major changes to this devolved structure are likely to acquire board approval, as are any other major decisions. The new board is to work along the lines of the boards of large plcs and quoted companies of which Dr Galvin has no shortage of experience.

It is a radically different structure from the one that David Doyle took over after the death of his father in 1988. Arguably Ireland's most successful hotelier, the group's founder operated an autocracy, his control over the company was complete.

David Doyle's wings may appear to have been clipped but he has also won some concessions under the new structure. The voting shares which control the company are to be more evenly distributed amongst the directors, including Mr Doyle.

Previously the majority of the voting shares were held by his mother, Mrs Margaret Doyle. Mr Doyle, his brother Michael and three sisters Bernie Gallagher, Ann Roche and Eileen Monaghan were all directors but could not out vote their mother, who is now in her eighties. The new arrangement is expected to ease the frictions that contributed to Mr Doyle's sudden departure. Agreement had already been reached in principle on a settlement that would have involved the other family members buying Mr Doyles shares. However, a last minute change of heart by Mr Doyle late last year is understood to have lead to a rapprochement, facilitated by Mrs Gallagher. Under the new arrangement she will become the deputy chairman of the group.

When Mrs Gallagher took over from Mr Doyle, many observers were surprised at the enthusiasm with which she took to her new task. A task for which she displayed considerable flair.

Doyle Hotels has not filed any accounts with the companies registration office since 1993, when it reported pre tax profits of £5.2 million on a turnover of £38.6 million. The strength of the economy and the particularly buoyant tourist season last year helped boost pre tax profits to over £11 million and turnover grew to the £50 million level under Mrs Gallagher's stewardship. The thought of selling his share of such a lucrative venture must have been one of the reasons that persuaded Mr Doyle to change his mind. Doyle Hotels is understood to be free of debt, despite having just completed a £30 million capital investment programme, and it is in a position to fund substantial expansion from its own resources.

In the short term, Dr Galvin's main contribution will be to bring his extensive experience of restructuring companies to bear on Doyle Hotels. "In any company, new people look right across it to see what are the weaknesses what are the strengths and what can be built on. It is important to ensure that it is run properly, performs well and creates value for the shareholders, who in this case are the directors," he said.

Doyle Hotels is now targeting the US and British markets for expansion. It already has two hotels in Washington, the Marriott Courtyard and the Normandy Inn and one hotel in London, the Clifton Ford.

Its Irish hotels are the Tara Towers, the Montrose the Berkeley Court and the Burlington in south Dublin, and the Westbury off Grafton Street.

The group also owns the Skylon Hotel in Drumcondra on the north side of Dublin and also the Green Isle on the Naas Road The group also owns a site on Dublin's St Stephen Green which would be suitable for a hotel development. However, this would cost around £30 million, according to industry sources. The group hopes to grow through acquisition, but in a measured manner. A number of acquisitions were examined over the last two years but passed over, primarily because they were thought to be too expensive. The group is now in the market for acquisitions of up to £30 million and is interested in three and four star hotels in the 200 bedroom to 400 bedroom range.