Dalata shares take a hit as on ‘more challenging’ Dublin market
Listed hotel company cites higher VAT and more Dublin rooms but UK business continues to grow
Dalata chief executive Pat McCann.
Hotel group Dalata said on Wednesday the Dublin market was more challenging in the second half of the year as the impact of the VAT increase and a rise in the number of hotel rooms in the capital was felt in the market.
The company said market conditions in the second half of the year were tougher than expected, with revenue per available room down 3.2 per cent over the 11 months to the end of November, compared to a decline of 1.4 per cent in the first half of the year. On a “like for like” basis, revenue per available room at Dalata hotels decreased by 3.2 per cent .
The hotel group also said a reduction in the number of events in October and November was also to blame for the tough market.
Shares in the Dublin-listed group fell 6.3 per cent on the downbeat assessment.
Elsewhere in Ireland, the company said performance was broadly similar to the first half of the year, with like for like revenue per available room down by 0.7 per cent for the 11 months to the end of November.
The UK portfolio has also performed strongly, with like for like revenue per average room rising 3 per cent over the period.
Dalata said earnings before interest, tax, depreciation and amortisation (Ebitda) for 2019 would be in line with market expectations.
The company also announced that it had signed an agreement to lease a new hotel in Liverpool. The new Maldron hotel at Park Lane is part of a mixed-use scheme being jointly developed by the Elliot Group and Valorem, and will have 260 rooms, a restaurant, a bar and meeting room facilities. Construction is expected to commence in the first half of 2020.
In the update, the company said it is continuing to work on its plan to have approximately 2,660 rooms on offer across Britain and Ireland.
“In Dublin, the construction of Maldron Hotel Merrion Road and the residential units has commenced with the hotel scheduled to open in [the second quarter of] 2021. The Samuel Hotel, Dublin, is also projected to open in [the second quarter of] 2021,” it said.
The company is carrying out a substantial project at its Clayton Hotel in Cardiff Lane, Dublin, with a new conference centre and ground floor layout expected to open in early in 2021. An extension, which will add 93 rooms, is expected to open in the second quarter of 2022.
In the UK, it said construction has started at its Glasgow, Bristol and Manchester hotels. Maldron Hotel Glasgow is scheduled to open in first quarter of 2021, Clayton Hotel Manchester and Clayton Hotel Glasgow are scheduled to open in the second quarter 2021, while both Maldron Hotel Manchester and Clayton Hotel Bristol are scheduled to open in autumn of 2021.
“The opening date for Maldron Hotel Birmingham has been delayed due to the developer looking to expand the development, delivering a mixed-use development incorporating our hotel as one part,” it stated. It is now scheduled to open towards the end of 2022.