Temporary closure sees Ashford Castle hotel fall into red

Salaries of over €1m paid to 200 temporarily laid-off staff at the five-star Ashford Castle hotel, while the business was shut down for three months last year, contributed to the hotel incurring losses of €4m in 2014.

Speaking yesterday, managing director of Red Carnation Hotels, Jonathan Raggett, confirmed that the business last year paid staff over €1m while they were off work as the hotel underwent the first phase of a major restoration.

He said that the business again this year paid out over €1m to staff for the three months they were off during the second period of restoration.

“These people have got livelihoods and families. Clearly, paying the salaries was damaging to any profits or losses we were going to make but it was the right thing to do,” he said.

Staff costs at the firm last year rose 88% going from €2.4m to €4.5m.

The business emerged from receivership in 2013 after the UK firm paid €20m for the Co Mayo resort in 2013.

Mr Raggett confirmed yesterday his firm has spent €100m on restoring the property that “includes bedrooms to compare with any five-star hotel in the world”.

The restoration also includes the addition of a 30-seater cinema and a spa.

Mr Raggett said he was confident the firm will secure a return on its investment, saying “this is a long-term project and it will be there for many, many years.”

“This is an iconic castle with a huge history and was not acquired to do a quick flip with the aiming of selling short term. It is, without doubt, the greatest property in the group and will be part of our collection for many, many years to come,” he added.

Revenues at the hotel last year increased by 40% to €9m.

Mr Raggett said “this year for the business was better than last year and the following year will be even better. We are really in a good place and excited about the business,” he said.