US guests helped Dromoland Castle to revenues of €21m last year
Pretax loss of €3.5m driven by €20m refurbishment of luxury Clare hotel
Mark Nolan, managing director at Dromoland Castle: “Business has never been as good”. Photograph: Eamon Ward
A surge in guests from the United States helped Dromoland Castle to generate record revenues of €21.7 million last year, a 3 per cent increase on 2016.
Mark Nolan, managing director of the five-star Clare property, said “business has never been as good” in sales terms.
The hotel is in the midst of a €20 million refurbishment and costs associated with the revamp resulted in a pretax loss of €3.47 million for last year.
Mr Nolan said the loss is “of no concern” because it relates to the re-investment in the castle. At an operating level, the hotel reported a profit of €3.62 million, up 4 per cent on the previous 12 months.
Accounts for Dromoland Castle Holdings Ltd show that the business booked a €4.96 million cost from the refurbishment last year while the overall loss also takes account of non-cash depreciation costs of €1.86 million.
“Last year we had a very strong year. We had a very strong growth on our average room rate and that is really our focus,” said Mr Nolan.
The hotel firm also operates the adjoining Inn at Dromoland and rooms sold between the two properties last year increased by 4,190, or 8 per cent, to 55,396.
Earlier this month, the Commercial Court appointed receivers to take control and sell a 6.8 per cent share of the Dromoland Castle firm owned by Anthony O’Reilly.
Chief financial officer Joe Hughes said that while the move was “unfortunate” from Mr O’Reilly’s perspective, it “has no impact operationally on the hotel”, but rather removes a degree of uncertainty that was there.
The 2017 accounts show that Anthony O’Reilly’s son Gavin stepped down from the board of the hotel firm at the end of last year.
Mr Hughes said that the average room rate at the castle is €330 and during the summer peak can go up as far as €600. He said the hotel did not plan to “add another 50 or 60 rooms” to its existing 97, with its focus to go instead on growing the average room rate.
“The US market is racing ahead and our contacts in the US tell us it is going to be very strong this year,” he added.
The hotel is looking meanwhile to grow interest in the Far East, which has just gained direct flight access to Dublin, and Mr Hughes reported an increase in its UK business over the first five months of this year, albeit off a low base.
Mr Nolan said that the hotel has 98 per cent customer satisfaction “and room rates are not as issue as long as you can deliver on product”.
The company last year declared a dividend of €250,000 for shareholders, most of whom are members of a Wall Street-assembled consortium of wealthy Americans.
At the end of last year, the Dromoland firm had shareholders’ funds of €20.2 million that included accumulated profits of €9.62 million.
Staff costs at the company last year increased from €8.6 million to €9 million and directors’ remuneration totalled €70,054.