Clayton Hotels owner Dalata says full recovery could take until 2024

Dalata Hotel Group chief executive Pat McCann and CEO designate Dermot Crowley. Mr Crowley said the group may not see a full recovery until late 2023 or early 2024. 

The chief executive designate of the Dalata Hotel Group has said it could be 2024 before the company returns to pre-Covid revenue levels.

However, Dermot Crowley said the owner of the Clayton and Maldron hotel chains is hopeful of a recovery starting in the second half of this year, but is also financially strong enough to withstand further disruption.

Mr Crowley is currently second in command at Dalata, but will take over from founder Pat McCann as group chief executive towards the end of this year.

Speaking after Dalata posted a €111.5m pre-tax loss for 2020 and a 68% drop in annual revenue to €136.8m, Mr Crowley said the group has built in enough liquidity to allow it to weather the Covid storm “for quite a while”.

He said Dalata, which is the largest hotel operator in the country, could remain largely unbruised by the pandemic fallout into 2023 in a worst-case scenario.

Between cash and undrawn debt facilities, Dalata has more than €290m in available liquidity. In full lockdown, it is burning through around €15m of cash every quarter. Although all of its Irish hotels are currently open, they are only available to essential workers and frontline staff.

'Very pessimistic'

Mr Crowley said he views some estimates that hospitality won’t fully recover until 2025 as being “very pessimistic” and said Dalata “should be getting there” by late 2023/early 2024, helped by the twin boost of a vaccine rollout and pent-up customer demand. In 2019, Dalata made profits of nearly €90m and generated revenues of €429m.

He said he is hopeful Dalata's Irish hotels will be able to reopen to the public in June, but said a return of inbound international visitors will be the real key to recovery. Dalata has benefitted from domestic ‘staycation’ visits, but 50% of users of its Dublin-based hotels are overseas guests.

He said Dalata should see some recovery first in the UK, where it has 12 hotels. British hotels are due to reopen for business and corporate guests next month before reopening for leisure visitors in May.

The construction of some of Dalata’s planned Irish hotels has also been hampered by the Covid restrictions.

Overall, though, Mr Crowley said the group will remain focused on the UK, in terms of expansion, with plans for mainland Europe a longer-term play.