Dalata begins mainland Europe expansion with German hotel deal

The Dalata Hotel Group - which owns the Clayton and Maldron brands - is expected to be a huge beneficiary of a potential wave of European hotel consolidation.

The Dalata Hotel Group has announced its first hotel in continental Europe, with a move into Germany.

The country’s largest hotel operator – and owner of the Clayton and Maldron chains – has agreed to buy the operating leasehold of the existing Nikko Hotel in Dusseldorf.  The four-star hotel will retain its current name and will not be rebranded.

Dalata has long-since held ambitions to expand into mainland Europe, with a particular eye on Germany and the Benelux countries. However, late last year the group’s management suggested such expansion was still a medium-term target.

It is understood the UK, where Dalata has been growing aggressively over the last few years, remains its key expansion territory. Dalata has not said what its expansion targets are for mainland Europe, but it is understood that this is the first of many hotel transactions for it on the continent. 

It also remains unclear as to what Dalata's mainland Europe model will be; whether through owning and operating existing properties, rolling out its Clayton and Maldron brands, or through a combination of both.

Analysts, though, see growing opportunity on the back of the widespread damage done to the European hospitality sector by the Covid crisis.

“Dalata’s success in navigating Covid-19 and paying all landlords in full and without delay or issue has significantly raised its profile among hotel owners across Europe, creating opportunities such as this,” said Davy analyst Colin Grant.

“We expect more opportunities to present themselves as many hotel operators across Europe have business models and financial structures that are challenged,” he said.

Dalata chief executive Dermot Crowley said: “This announcement represents our first step into continental Europe and is a very exciting opportunity as we work towards building our presence in selected European cities." 

"Whilst retaining our focus on growth in the UK, we have also been exploring opportunities in Europe that are complementary to our portfolio in the UK and Ireland,” Mr Crowley said.

Dalata is due to report annual results next month. It said, in November, that the trading recovery it saw after hospitality reopened continued into the latter portion of the year.