THE OWNERS of the plush Four Seasons Hotel in Dublin’s Ballsbridge have appointed KPMG to draw up a rescue plan for the loss-making property.
It is understood that Seán Mooney, an experienced corporate adviser with KPMG, has been appointed by the Nollaig Partnership, a group of 20 investors who own the five-star hotel.
These include financier Derek Quinlan, who put together the syndicate of investors, former AIB chairman Dermot Gleeson, Kerry-based hotelier Francis Brennan, and property developers Mark Kavanagh and David Arnold.
The Four Seasons has had a difficult year, with turnover believed to have declined by about 30 per cent as custom from business travellers and corporate entertainment has dried up.
One informed source said occupancy has been as low as 40-50 per cent. The hotel has had to discount its prices to compete with other venues in the area, notably Seán Dunne’s D4 properties.
KPMG will have to negotiate with a number of parties in framing a rescue for the hotel.
These include the Four Seasons hotel chain, Anglo Irish Bank, which provided substantial debt funding for the €86 million project, and the RDS, which owns the land and earns about €500,000 a year in rent from the hotel.
The owners of apartments at the hotel also hold an interest in its future as their deals included access to the services of the hotel.
Speculation has mounted that the hotel could even end up with Nama, the State agency that will soon take charge of bad property loans on the books of Irish banks.
The Four Seasons group, which runs the hotel, has already introduced a number of cost-cutting measures to reduce its overheads.
The hotel is said to be operating in the red and rumours have circulated in recent weeks about its future. But one informed source said the business has sufficient funding to continue to trade for the “foreseeable future”.
KPMG has been asked to look at strategic options for the business and draft a new business plan in January. The hotel was built with substantial tax breaks, but these capital allowances have expired.
The Four Seasons opened in Dublin in February 2001. It was an icon of the Celtic Tiger boom, and its trendy Ice Bar became a hang-out for the famous and wealthy.
It has 183 rooms and 14 suites, an indoor pool and spa services.
The five-storey property has been dogged by difficulties from the start, however.
Its planned opening in the summer of 2000 was missed when cost overruns delayed construction. Advance bookings had to be cancelled and the company building it, Simmonscourt Holdings, went into receivership.
A financial rescue package, put together by Quinlan Private, was eventually agreed, with financial backing from Anglo.
The hotel originally had 259 rooms, but two floors were subsequently renovated to accommodate expensive penthouse apartments. Former Taoiseach Albert Reynolds was among the buyers, having relocated from a house on Ailesbury Road, which he sold for €14 million.
It is understood that four of the apartments remain unsold and, with the Irish property market having collapsed, KPMG is unlikely to pursue selling these as an alternative option.
Two-bed apartments in the hotel were advertised recently for €6,000 a month.
