Five-star hotels scramble to retain luxury experience under new anti-virus regime

With wealthy Americans a no-show for now, luxury Irish hotels must pivot towards the domestic market for business

The new Fáilte Ireland operating guidelines for hotels released this week will pose specific challenges for Ireland’s 36 five-star properties, which justify their premium rates through attentive guest contact.

For the foreseeable future, room service will instead become tray-left-in-the-corridor service. No more stashes of extra pillows. No spa treatments worth mentioning. Staff will be wearing visors or masks, and restaurants will be at least half empty.

The John Malone-backed MHL group owns four five-star hotels including the Westin and Intercontinental in Dublin, the Powerscourt in Wicklow, and Glenlo Abbey in Galway. Paul Higgins is a partner in the group.

Higgins summed up the operating challenge facing top-end properties in the age of Covid-19: “We have to provide a five-star hotel experience, not a five-star hospital experience. We need to keep our guests happy and safe, but we must do it in the background. We cannot be constantly doing it in their faces.”

Five-star properties have in recent years been the most profitable part of the hotel sector, generating more than €29,000 annual profit per room in 2018, according to consultants Crowe. It says 2020 will be all about “survival”.

"When the market was on the way up, five stars grew their profits more quickly than everyone else," says Aiden Murphy, the Crowe partner who oversees the annual publication of its respected hotel industry survey.

“The same will happen on the way down. Rates will fall very quickly.”

Five-star rates four years ago were almost one-third lower than they were in 2018. “They could fall back to where they were in 2016,” said Murphy. In private, industry leaders suggest they may fall further. “It will be dog eat dog on rates,” said one hotelier.

Irish five-star hotels rely disproportionately on wealthy American visitors, who fill 34 per cent of all their rooms, according to Crowe. The US market is gone for now.

“Five stars will be looking to replace those with domestic leisure travellers this summer, in a market where everybody else will be looking to do the same.”

Murphy says Dublin, with 10 five-star hotels comprising 40 per cent of the segment’s room stock, will be “disadvantaged” in the race for leisure tourists.

However, the sector as a whole is not as imperilled as it was heading into the 2008 crisis because, Murphy says, hotels are less indebted than before, with much of their recent investment provided by equity funds.

The Irish Times spoke to a half dozen five-star hotel general managers to get a sense of how they intend to cope with the new restrictions.

Mark Nolan, Dromoland Castle, Newmarket-on-Fergus, Co. Clare

The 100-bedroom castle on 450 acres is among the top Irish destinations for US visitors. It is even owned by rich Irish-Americans. But this year it must target locals, a harder sell when rates rarely dip below €500 per night.

Three weeks after it shut for lockdown, Dromoland surveyed past Irish visitors on their expectations for reopening. “While safety and hygiene are important, they said they didn’t want to come to a place that wasn’t the Dromoland they remembered,” said Nolan, who has run the resort since 1989.

He mulled whether to give staff perspex visors or masks. He concluded visors “make them look like welders in a garage” so he ordered bespoke Dromoland masks to match their uniforms. The safety screen at reception was made by a local carpenter, Nolan says, who added some decorative flourishes.

Holding back on close customer contact, which is integral to the five-star experience, will take effort and training for Dromoland’s staff: “It’s not instinctive but we are getting better.”

In a new marketing drive, Dromoland has joined forces with its rival Ashford Castle in Mayo, another top destination for US visitors, to target domestic leisure travellers with a Legendary Castles package covering both properties.

Nolan acknowledges that Irish tourists won’t pay the rack rates of US visitors, but “we are surprised at the rates they are prepared to pay”. He said Dromoland may still have to reduce its rates by “30 to 40 per cent” in some cases. He will be happy if it gets near 50 per cent occupancy by year end.

Peter MacCann, the Merrion hotel, Dublin city

The Georgian five-star opposite Government buildings stayed open throughout lockdown. It includes 15 apartments, half of which were occupied. Its lockdown customers also included an Italian family who were marooned for six weeks because their home town was quarantined.

MacCann says remaining open in lockdown reinforced the message that when it comes to anti-virus safety, “so much of it is personal responsibility, and our guests have made that apparent”.

He has given staff the option of visors or masks, although visors won’t suit its commissionaires on the street “because they don’t work with the top hats”. Concierges and receptionists will be behind screens without masks, but will wear face coverings if they step out to help customers. MacCann says the hotel will try to physically change as little as possible.

“Customers will be as mindful of safety as we are. I think managing that interaction will be easier than many people think,” he says.

Dublin’s five-stars will find it harder to attract domestic leisure travellers, because most will be heading out of the city for their breaks. “Occupancy is the real unknown. If Dublin hotels achieve 30 per cent occupancy for the rest of the year it wouldn’t be bad. We might average that, with highs of 45 per cent.”

There is no reopening date yet for the Merrion’s Cellar Bar, a popular city lunch venue: “There is no logic in rushing to reopen everything.”

Paul Heery, Adare Manor, Adare, Co Limerick

After a revamp that is reported to have cost JP McManus and his family up to €70 million, you might think that the future Ryder Cup venue would be in a rush to reopen. Adare will stay closed until July 30th as it takes its time redesigning exactly how staff and customers will interact.

“We want it to feel as close as possible to before. But this journey is unknown. We don’t have all the answers yet. We are figuring it out,” said Heery.

Its 122-metre Gallery restaurant – the second-longest room in Ireland after Trinity’s Long Room – will see changes for social distancing but Heery won’t take tables out of the Michelin-starred Oak Room: “We’ll just tightly manage capacity.”

He has ordered see-through face masks for staff so that customers “can see us smiling”. Although the hotel won’t reopen for another seven weeks, its standalone Carriage House restaurant (effectively the clubhouse for golfers) will open on July 1st. Throughout lockdown, the resort provided hundreds of meals daily for the local hospital and also for a meals-on-wheels delivery service.

The golf course has been open since May 18th. Adare recently invested in a new leisure amenity, the Padel Club, which includes a swimming pool, gym and courts for the racquet sport, padel. It will open as planned in September.

Heery says Adare “is not planning on reducing rates in any way”. Its standard “classic” rooms are still priced at €725 per night for August, with some suites double that. It will tailor more affordable two-to-three night packages for the Irish guests it must target this summer.

Mark Dunne, Mount Juliet, Thomastown, Co Kilkenny

The resort, bought in 2015 for €15 million by businessman Emmet O’Neill and investment group Tetrarch, will have no problems with social distancing on its 530-acre grounds. Lockdown has, however, cost the resort the Irish Open golf tournament that was slated for two weeks ago. “Hopefully we see it again,” he says.

It will be ready for June 29th but initially with only its 32-suite Manor House building in operation. The 93-bedroom Hunter’s Yard will stay closed until mid July. Its new pool will be finished about two weeks after the hotel reopens.

With unlucky timing, it recently refurbished and expanded its meeting rooms, bringing the total to seven. The payback may take longer than planned as the local corporate market remains sluggish.

It signed up in December to become part of Marriott’s Autograph collection, giving it access to the US brand’s global customer base. For now, the international market remains effectively closed off but the Autograph move will be important for Mount Juliet in the long-term, Dunne says.

He says Irish tourists are prepared to pay “for an elevated experience” and with some rooms on weekend nights in July available for €384, Mount Juliet’s proximity to Dublin may help it attract short-break guests from the capital.

“For the first time ever in five-star, the guests might actually want staff to stay away a bit,” said Dunne. “The guest experience will be led by what they want.”

The hotel had a “big injection” of bookings in the past week since the reopening roadmap was compressed: “But it is going to be a long road back for the industry.”

Séamus Crotty, Sheen Falls Lodge, Kenmare, Co Kerry

Another Irish five-star that has changed hands in recent years. Sheen Falls was bought in 2018 for €17 million by Singaporean businessmen Stanley Quek and Peng Loh.

Kerry will miss its usual busloads of US tourists this summer, but it has also always been a popular region for domestic visitors. About 35 per cent of Sheen Falls’ guests came from the US, but 55 per cent were Irish.

The new Fáilte Ireland operating guidelines this week underline how difficult it will be for hotels with close-contact spa facilities.

“We don’t know if or when we will reopen our spa,” said Crotty. “You are putting staff and guests in a confined space and there is inevitably close contact. We are hopeful we may be able to reopen sometime with limited treatments, but classic treatments like facials will always be a problem.”

The hotel will reopen on July 1st with about 85 staff in total, where it would usually have around 110. “We are pro-masks in general,” said Crotty.

The anti-virus restrictions on public gatherings have disrupted its weddings business. Crotty says six weddings from earlier this year have rescheduled.

Sheen Falls is closed in January but in other off-season months, it typically hosted a wedding every two weeks: “The social distancing rules are a huge concern for that part of the business.”

Damien Bastiat, Ballyfin Demesne, Co Laois

The boutique Ballyfin’s solution to social distancing is to reopen with just 12 of its 20 bedrooms in operation for now. Bastiat says the restaurant can fit just 12 separate tables under the 2-metre physical distancing guidelines, so that helped set its cap on rooms.

“Ballyfin is a place of escape. We don’t want to apply rules to our guests, such as asking them to make reservations to eat,” he says. “Time and space are the ultimate luxuries. There will be a maximum of 24 guests in a 40,000 sq ft hotel.”

Bastiat says the strict capacity approach is to help Ballyfin “learn how to walk before we learn how to run” under the anti-virus restrictions. Only one person or couple at a time will be allowed in the gym. The sauna will remain closed.

The hotel is “not a property where you can put arrows on the floor” so some of the furniture and fixtures will be rearranged to “gently suggest” to guests where they should go. Bastiat said staff have spent the last week role-playing different guest interactions, as it prepares for its upcoming reopening.

It used to price separately for low-season and high-season, “but there is not going to be a high season anymore”.

“You can’t plan for everything. Every business has to think on its feet right now.”