Dalata Hotel Group buys four leaseholds for €40m

The Dalata Hotel Group has continued its expansion drive by spending €40m on acquiring operatorship status in four hotels.

The spend will see Dalata — which is the largest operator in the Irish hotel market, via its ownership of the Maldron and Clayton brands — add 1,171 rooms to its portfolio.

The purchase of the leasehold interests in Dublin’s Gibson Hotel, Limerick’s Clarion Hotel, the Croydon Park Hotel in London and the Clarion Hotel in Cork will also result in all four being rebranded as Clayton hotels.

It will bring to 18 the number of Clayton-branded hotels in Dalata’s portfolio and €14m will be spent by the group on refurbishing the Cork, Limerick and Croydon properties.

The Clarion in Cork is the only one of the four which Dalata already owns; it having bought the premises for €35m last October.

Until now, all of the above properties have been operated by the Choice Hotels group.

Yesterday’s announcement also saw Dalata securing a short-term management contract for the running of the Clarion Hotel, Liffey Valley in west Dublin.

According to Dermot Crowley, Dalata’s deputy chief executive: “This transaction gives Dalata a further 960 rooms in the cities of Dublin, Cork and Limerick.

"All three cities are experiencing strong RevPar [revenue per available room] growth in the recovering Irish economy.

"The transaction also allows us to further grow our portfolio in the UK with the addition of 211 rooms in Croydon.”

Late last year, Dalata raised expansion funds of €250m — via a share issue and debt raising round — and embarked on a growth campaign which will see it buy existing hotels, enlarge some of its own premises and build new hotels.

The group’s growth drive has quickened in the past month with the €13m purchase of the Tara Towers Hotel in Dublin, followed earlier this month by a similarly valued purchase of the Clarion in Sligo.

While the bulk of Dalata’s current expansion campaign is focusing on the Irish market, the group has plans from later this year onwards for a pronounced expansion in the UK.

The group’s share price was up by over 2% yesterday at just under €5.