Shelbourne profits suffer after dip in tourism

THE landmark Shelbourne Hotel in Dublin made a pre-tax loss of €81,904 in the year to end June 2003.

The hotel, one of Ireland’s oldest, has had a torrid time in the past few years with a downturn in tourism in Ireland and financial problems at its owner, Le Meridien group.

The loss for the period was down significantly on the €1.1 million it incurred in 2002, but a €2.3m tax bill pushed down net loss for the year, accounts just filed at the companies’ office show.

Turnover for the year was ahead strongly, up 27% to €16.8m. Despite its parent’s problems, the hotel remains in a relatively healthy position, though the company’s cash at bank fell from €1.2m to €361,709. Shareholders’ funds stood at €127m.

During the year, the hotel was forced to cut its staff numbers by 15 to 209, but the effect on its annual wages bill was negligible as it went from €3.87m to €3.8m.

A proposed €5m dividend to its former parent was cancelled because of the financial difficulties.

Last June, the Le Meridien group fell into trouble when it breached the terms of its banking covenants. After a lengthy period of talks with its creditors, ownership of the hotels in the group passed to the Royal Bank of Scotland group.

The hotel, home to the famous Horseshoe Bar, and the site of the drafting of the Irish constitution, was founded in 1824 by Martin Burke, a businessmen from South Tipperary.

He aimed the hotel at the Anglo- Irish land gentry and it prospered for the next 130 years.

The hotel remained in Irish hands until it was bought by the British group Trusthouse Forte group and underwent a €10m restoration programme.

In the 1990s it passed into the ownership of media company Granada, who passed out the management to the Le Meridien Hotel group. There was concern among its many patrons that the Shelbourne name would disappear.

A further change of ownership occurred in 2001 when Granada sold the Le Meridien chain to a consortium headed by Japanese investment bank Nomura Securities, in a deal engineered by British financier Guy Hands.

The Royal Bank of Scotland have handed over management of the hotel to the Marriott group, which also runs the hotel on the Mount Juliet golf course.