North Star Hotel is bustling after its €20m refurbishment

Bank of Ireland provided €124 million in lending to the hotel sector last year

The Parlor at the new four-star North Star Hotel in Dublin 1.

The Parlor at the new four-star North Star Hotel in Dublin 1.

 

The bustling new Parlor café at the four-star North Star Hotel opposite Connolly train station in Dublin’s north inner city sums up the effect of a €20 million-plus refurbishment of the property in recent years by its owner, Brian McGettigan.

Once a dreary, three-star property, the North Star has been transformed into a hip hotel with trendy food and beverage offerings on the ground floor and modern bedrooms that make full use of smart technology.

From their TV remote control or mobile phone, a guest can open and close the curtains, adjust the room temperature, order room service and, of course, change their TV or radio channels.

The Address at Dublin 1 is a 75-bedroom hotel-within-a-hotel. Built in the little-used car park at the back of the North Star, it has its own check-in desk and lift, and a club lounge on the roof where wine and smoked salmon is served at around 6pm as part of your room package. All of its rooms uses the latest smart technology.

Rates start at €189 a night and Mr McGettigan says the new rooms helped it achieve growth of more than 30 per cent last year, of which 10 per cent was like-for-like.

Sector lending

The multi-million euro upgrade of the North Star was backed by Bank of Ireland, which is actively lending to the sector.

The bank did a “modest” €4 million refinancing for Mr McGettigan on the North Star in 2010 for loans that were previously held by Bank of Scotland (Ireland), which quit the Irish market following the crash.

“That was the foundation for a good relationship going forward,” Mr McGettigan explains.

“A couple of years later we bought what was the Maldron hotel in Citywest [near Saggart, Co Dublin] and which is now called the Kingswood hotel,” he says.

That was a €5 million deal, with the hotel upgraded to a four-star property. Mr McGettigan also refurbished the neighbouring Kingswood House, putting in a cookhouse restaurant with further borrowings from Bank of Ireland.

Mr McGettigan has also secured planning permission for an additional 90 bedrooms and ancillary facilities at Citywest, in a development that would cost about €12 million.

“We can push the button any time. I have to talk to the bank. There’s very good growth out there. It would be a good investment.

“We’ll use technology there, too. Have a club lounge. Look at some one-bed apartments, suites for a longer term stay. Out there, you would get people who are on a six-week placement [with companies]. They want something different. There’s also a really strong market out there for meetings and events. It’s a great location.”

Bank of Ireland has a 10-strong team focused on the hotel sector, led by Gerardo Larios Rizo, who trained as a chef in his native Mexico before moving into the hotel industry.

Mr Rizo came to Ireland in 2001, taking up a role with the Radisson Group before joining Dalata, Ireland’s biggest hotel chain, in 2008. He joined Bank of Ireland in 2012, initially to do loan restructurings.

Huge requests

Mr Rizo says the bank has seen “huge requests” for finance for refurbishments, extensions and new builds, with 13,000 new bedrooms in the pipeline for Dublin alone.

“There’s been a big push in the last few years in terms of technology because technology is the biggest factor in trying to secure a better rate,” he says.

Bank of Ireland provided €124 million in lending to the sector last year, with about two-thirds of this lending outside Dublin.

“Over the last two years the majority of funding we have been doing has been for refurbishments and extensions,” he says.

“Before that it would have been a lot of refinancings from intermediate debt holders but that is shifting to a more normal trading scenario where people are looking to acquire another property or reinvest money in their asset.”

Competition comes from AIB and Ulster Bank, and non-bank providers such as Oaktree Capital and Goldman Sachs, he says.

Other hotel projects financed by Bank of Ireland include Donie Cassidy’s new 51-bedroom Hotel 7 in Dublin, for which it provided €7 million in funding.

And an extension and refurbishment of the Amber Springs in Gorey, Co Wexford, which is owned by the Redmond brothers.

Ireland’s hotel sector is in rude good health, helped by record levels of tourism, a booming domestic economy, and a special 9 per cent VAT rate introduced in 2011 to help the sector get back on its feet.

Overseas visitors to Ireland grew by 370,000 to 9.9 million in 2017, with 16.2 per cent growth from North America and 5 per cent from Europe, although the UK market was down.

Mr McGettigan is optimistic about the outlook. “There’s good growth in the market, which is great because there were some awful years [post the crash in 2008]. We will continue to invest.”