Brexit yet to impact on Ireland’s largest hotel group
Dalata reaffirms earnings guidance, and notes strong performances in its Dublin hotels
Dalata operates the Clayton and Maldron hotel brands
Ireland’s largest hotel group Dalata has yet to see a negative impact from Brexit, it said on Tuesday, reaffirming its full-year earnings guidance in a trading update.
Dalata, which operates the Clayton and Maldron brands, said that while it noted the “ongoing uncertainty” surrounding the final outcome of Brexit, it had seen no negative impact on trading in any of its UK or Ireland hotels to date.
The listed group, with hotel assets exceeding €1.1 billion, flagged that trading in the final four months of the year were “as expected”, adding that earnings would be in line with market expectations.
The hotel chain noted that the Dublin market in particular remained “very strong in the second half of the year”. Revenue per available room (RevPAR) – a key metric in the hotel business which assesses the ability to fill its available rooms at an average rate – grew 8.8 per cent for the 11 months to the end of November compared to market growth, measured by travel research company STR, of 7.4 per cent.
RevPAR in the UK grew by 3.2 per cent, with regional hotels performing “particularly well”. Dalata’s hotels outperformed the market in each city other than Leeds, the company said.
The group said extension work at the Maldron Hotel Parnell Square in Dublin had been “substantially completed”, and the Maldron in South Mall, Cork, would open this week.
“Early trading indications are very positive,” said Dalata deputy chief executive Dermot Crowley.
“As an example, Maldron Hotel Kevin Street in Dublin opened in July and achieved occupancy levels of over 90 per cent in each of September and October. We also completed significant extensions at three of our Dublin hotels and one of our Galway hotels.”
“The positive trading impact of hotels opened during 2018 will be significant on a full year basis in 2019, which in turn will reduce our net debt/EBITDA ratio as we go through next year.”
Davy analysts said the substantial number of new rooms Dalata has added this year “strongly underpins” its 2019 earnings forecast of €135.6 million, which represents an 18 per cent increase compared to this year’s number.
Dalata is adding more than 2,100 rooms to its portfolio. Its London hotel is scheduled to open towards the end of January 2019, while construction is due to start on three sites – Dublin, Manchester and Glasgow – in the first quarter of next year.
Founded in 2007, Dalata’s portfolio consists of 29 owned hotels, 10 leased hotels and three management contracts with a total of 8,834 bedrooms.