Accounts just filed with the Companies Registration Office by Torriam Hotel Operating Company show the chief factor behind the increased loss was the €7.5m costs incurred by Torriam, associated with a legal case taken against it by the hotel’s owner, Shelbourne Hotel Holdings Ltd (SHHL).
The case concerned Torriam’s fulfilment of obligations arising out of the parties’ 20-year management agreement for the operation of the Shelbourne.
The accounts state an arbitration tribunal on November 10 last year dismissed SHHL’s claim to be entitled to terminate the agreement and the €7.5m costs comprise the awards to the Shelbourne and Torriam’s legal, professional fees and arbitration costs.
A subsidiary of hotel giant, Marriott International, Torriam’s revenues declined by 31% from €13.5m to €9.3m to the end of December last.
The figures show that €3.6m of the €13.5m revenues generated in 2009 related to the operation of a reservation and customer care centre to other Marriott companies that was discontinued by Torriam last year.
The discontinuation of the customer care centre impacted on the numbers employed by Torriam last year, declining from 486 to 323 with staff costs decreasing by 26% from €12.6m to €9.2m.
However, the figures show that the company made a gross profit last year of €55,923 compared to a gross profit of €3.6m in 2009.
The pre-tax loss last year compared to a loss of €2.8m in 2009. The loss last year increased the company’s accumulated losses to €11.3m.
The company had net liabilities totalling €8.9m at the end of last year and a note attached to the accounts states that the company’s ultimate parent company, Marriott International has confirmed that it will continue to support the company as and when required to enable the company to meet its commitments.
The company that owns the hotel, Shelbourne Hotel Holdings Ltd had accumulated losses totalling €208.4m at the end of 2009 that included a €155m writedown in the property.
According to its most recent accounts, SHHL’s future plans include the directors’ intention to restructure the existing group loan facilities with the assistance of the group’s lending institutions. The hotel re-opened in March 2007 after being closed for one year due to refurbishment increasing the number of rooms to 265.
The hotel was purchased by a consortium including Mr Bernard McNamara, Jerry O’Reilly, John Sweeney, David Courtney and Bernard Doyle for €140m in 2004.