By Gordon Deegan
The appointment of a receiver to sell Tony O’Reilly’s stake of 6.8% in the five-star Dromoland Castle will have no impact on the operations on the hotel, its chief financial officer Joe Hughes has pledged.
The comments come as the five-star hotel posted a 3% increase in revenues of €21.7m in 2017 after a surge in US tourists, though it still posted a loss because of major refurbishment costs.
On the receiver being appointed to Mr O’Reilly’s stake, Mr Hughes said: “It doesn’t affect us operationally. It is unfortunate from Mr O’Reilly’s personal perspective but it has no impact operationally on the hotel.”
He said the move had lifted a degree of uncertainty, however.
The general Manager of the Co Clare resort, Mark Nolan, said “business has never been as good”.
The castle is undergoing a €20m refurbishment and costs associated with the revamp meant it posted a pre-tax loss of €3.47m.
Accounts by Dromoland Castle Holdings Ltd show that the business booked a €4.96m cost from the refurbishment last year and booked non-cash depreciation costs of €1.86m.
The company’s operating profit before exceptional costs and depreciation was €3.62m, up 4% from 2016, as revenues increased by 3%.
Mr Nolan said: “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.”
The hotel firm also operates the adjoining Inn at Dromoland.
Mr Hughes said it had an average room rate at the castle of €330 but can soar to €600 in the summer peak.
“The underlying performance indicators are very, very strong. The US market in racing ahead and our contacts in the US tell us it is going to be very strong this year,” Mr Nolan said.
He said the hotel is looking to tap markets in the Far East this year, as direct flights into Ireland offered expansion opportunities.
“It is more about future proofing that shifting our business,” he said.
Despite the uncertainties of Brexit, the hotel’s UK business has increased in the first five months of 2018 albeit from a low base.
Employing around 400 people between the two hotels, the hotel plans to invest more money into the Inn at Dromoland next year but has no plans to build an extension at the castle property.
At the end of last year, the Dromoland firm had shareholder funds of €20.2m, including accumulated profits of €9.62m.
Staff costs at the company last year increased from €8.6m to €9m in 2016, while pay for directors totalled €70,054.