Hotel accounts help illustrate success of Covid business supports

Some hotels outside Dublin actually made a decent fist of worst year in sector’s history

Dublin hotels were by far the hardest hit last year. Photograph: iStock

Dublin hotels were by far the hardest hit last year. Photograph: iStock

 

One of the real successes of the economic dimension of the Government’s pandemic response is the extent of the financial supports for businesses. Few sectors needed them as much as hospitality and, specifically, hotels.

The practical impact of the various subsidies and grants for hotels in different parts of the country is neatly illustrated in a series of 2020 accounts filed this week for hotels associated with the McEniff family from Donegal. They own properties including the Skylon in north Dublin, the Yeats Country Hotel in Sligo and the Holyrood in the family’s hometown of Bundoran.

Accounts for Babodana, which owns the Skylon, show sales fell €5 million to €2.2 million, a catastrophic collapse. However, it staunched the damage at a net loss of €628,000, compared with a profit of almost €1 million in 2019. Operating expenses were €2.6 million – €400,000 more than its sales. But the pain was limited by €580,000 of “other income”, which would include any State payments.

Dublin hotels were by far the hardest hit last year. Outside the capital, hotels with access to a summer of domestic tourism performed reasonably well. The McEniffs’ Yeats Country Hotel made a profit in 2020 of €206,000, while cash on hand increased almost sixfold to €610,000 by year-end.

Meanwhile, the Holyrood property actually flipped from a 2019 loss of €233,000 to a 2020 profit of €294,000. Cash on hand also increased there by fourfold to €603,000.

The relative financial stability of the Sligo and Donegal properties in 2020, perhaps the most disastrous year for the Irish hotel sector in its history, was achieved without fresh equity or any increase in debt. If and when the pandemic ends decisively, these hotels will be primed and ready to bounce back.

The final bill for taxpayers for the financial supports for the sector will be enormous. But if the accounts of the McEniff hotels are anything to go by, they are doing the job that was intended – ensuring survival.

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