Dalata Hotel Group expands in UK but still cautious on plans

The Dalata Hotel Group is to maintain a cautious approach to expanding its presence in the UK despite announcing plans for its first foray there under its Maldron brand.
Dalata Hotel Group expands in UK but still cautious on plans

The group is the largest hotel operator in Ireland via its Maldron and Clayton brands. Yesterday it announced plans to open a hotel in Newcastle by the summer of 2018.

The four-star 226-bedroom hotel will be operated by Dalata on a 35-year lease (with rent reviewed every five years) and will form part of a mixed-use development also incorporating student accommodation and retail space. It will also be the first Maldron-branded hotel in England. Dalata operates six Clayton hotels in the UK.

Dalata had initially intended to open around another seven UK hotels by 2019 but delayed its UK plans after June’s Brexit vote.

Three months ago, speaking at the group’s interim results announcement, deputy chief Dermot Crowley said management was continuing to keep a close eye on the British market.

Yesterday, he hinted the UK growth would be a gradual process, adding that the Newcastle opportunity was “exceptional” and that management was comfortable with its rental cover projections.

“We are actively looking for opportunities in the major cities of the UK, but it is always difficult to predict the number of hotels we will secure in any one year,” Mr Crowley said.

“Brexit has led us to take a more cautious approach in terms of both projected rental cover and locations within cities,” he said.

He added that management continues to believe that “a gap exists in the upper three-star/ four-star market segment of the larger regional UK cities that our Clayton and Maldron brands can exploit. We have always considered the UK as being a natural market into which we would expand,” he said.

Dalata’s share price was up over 4% in Dublin yesterday before paring back. Well recovered from the aftermath of June’s Brexit vote, the stock nevertheless is still down 21% in the year.

However, Davy Stockbrokers has reiterated its ‘outperform’ rating saying the latest announcement is “evidence of another avenue of growth”.

More in this section

IE logo


The Business Hub

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
Puzzles logo

Puzzles hub

News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up
Cookie Policy Privacy Policy FAQ Help Contact Us Terms and Conditions

© Irish Examiner Ltd