Limerick hotel predicts profitable 2011 despite €1m loss

THE four-star Absolute Hotel in Limerick city, co-owned by one of the country’s best known hoteliers and developers Jerry O’Reilly, will operate at a profit in 2011, a spokesman claimed.

A hotel spokesman said yesterday that for the 12 months to the end of December 2009, the hotel recorded a €1 million loss.

Auditors for Absolute Hotel Limerick, O’Neill Foley, said that conditions at the company “indicate the existence of a material uncertainty, which may cast significant doubt about the company’s ability to continue as a going concern”.

The accounts show that the company had shareholders’ deficit of €4.67m and creditors owed €4.89m at the end of 2009.

The €1m loss in 2009 followed a €1.53m loss in 2008 for the hotel.

In the 2009 accounts, a note states: “The company’s ability to discharge its short-term bank obligations, trade creditors and accruals is dependent on the availability of the continued financial support from fellow group companies within the Gamine Group.”

The directors believe that future funding will be made available which will ensure that the company continues to operate for the foreseeable future and will prepare the financial statements on a going concern basis.

The 99-bedroom riverside hotel, which opened at the end of 2006, is co-owned by Mr O’Reilly who also controls hotels in Kerry and Kilkenny. The Kerry native is a business partner of developer Bernard McNamara in a number of ventures, including the redeveloped five-star Shelbourne Hotel in Dublin and the Radisson Blu hotel in Galway.

The Absolute Hotel operates in one of the most competitive markets in the country, with a number of hotels built in Limerick during the building boom in response to an historic under-supply of rooms in the city.

Last year, the President of the Irish Hotels’ Federation (IHF), Paul Gallagher, said that Limerick has twice the capacity that the market can support and will prove unsustainable in the future.

Earlier this year, a report by hotel benchmarking analysts City Occupancy and Savills found that Limerick’s room occupancy stood at 53% in 2010.

Joint managing director at City Occupancy Fergal McCarthy warned: ‘‘The number of hotels in Limerick is simply unsustainable.”