Revenue at Irish hotel group Dalata increases by nearly 30%

Dermot Crowley, chief executive of Dalata Hotel Group. 

Revenue at the Irish-based Dalata Hotel Group grew by nearly 30% over the first six months as it benefitted from a significant uptick in international travel into Ireland and the UK.

The group, which operates both the Maldron Hotels and Clayton Hotels brands, said it is continuing to monitor potential slowdowns in demand as a result of high inflation levels but it is “not seeing any such indicators”.

It cited a “resurgent UK Airport traffic statistics” and record numbers at Dublin Airport as a positive backdrop for the markets it operates in.

According to the company’s results for the first half of the year, revenue grew by 29% to €284.8m compared to the same period in 2022, with earnings before deductions were up 24% to €103.4m.

However, despite the increasing revenues, additional costs from depreciation and interest on leases meant that the company’s profit before tax dropped 3% to €50.4m 

According to the company, its revenue per available room was €109.41 during the first six months of the year, up from €86.61 last year. Its occupancy rate stood at 78.4%.

The group said it expects its “like for like” revenue per available room to increase to €140 for the July and August period. The average room rate in Dublin during the four-month period from May to August was €177.

Dermot Crowley, chief executive of Dalata Hotel Group, said the company has “delivered a record set of financial results” and “responded effectively” to the challenge of rising costs through cost and revenue management initiatives.

The group said that it has entered into fixed pricing contracts for approximately 80% of its projected gas and electricity consumption until December 2024. Gas and electricity costs for the first six months of 2023 amounted to approximately €15 million.

Based on expected consumption levels, it expects a reduction in these costs to approximately €14 million for the second half of 2023 due to improved pricing.

The company’s total asset portfolio is valued at €1.6bn, an increase of 11% since the end of 2022. Of that increase, 5% was due to a revaluation uplift on existing properties.

It has secured two London owned hotels in February and July, both of which have since begun trading under Dalata. These hotels added 280 rooms to their UK portfolio with a combined value of €112.3m.

The group is planning further expansion across the UK over the coming years. Maldron Hotel Shoreditch, London is expected to be completed in the summer of 2024 adding 157 rooms.

Three further leased hotels are under construction in Liverpool, Brighton, and Manchester, and are expected to open during the summer of 2024 adding 677 rooms.

Mr Crowley said the company has scope to further grow its property assets by €750m over the medium term.

The board of the company has announced an interim dividend of 4c per share which represents a total dividend payout of €8.9m. It will be payable on October 6 to ordinary shareholders on the share register at close of business on the record date of September 15, 2023.