If another downturn is on the way for the hotel sector, there is little sign of it yet in the five-star InterContinental in Ballsbridge, Dublin 4. Its lobby lounge teems with tourists and a few locals; the hotel is booked out in advance of a Garth Brooks concert. There are no Stetsons in sight, thankfully.
Staff criss-cross the lobby doing the lightning fast glide-walk that hotel workers often break into when they’re busy preparing something. It turns out to be the impending arrival of a charity lunch at the hotel, which is one of 12 owned by the MHL Collection backed by US billionaire John Malone and Irish businessmen Paul Higgins and John Lally (Malone, Higgins, Lally — MHL).
An element of this job is serious but I actually love having the fun and the craic. When I’m out with friends having a few drinks, I’m actually a giddy type of person. You don’t get the typical five-star persona all the time
The InterContinental has about 215 luxury rooms, conference facilities for up to 600 and it also services 24 privately-owned apartments on the upper floors. Meanwhile, back in its lobby, one-to-one business meetings are huddled on every second sofa. The whispering participants are mostly older men in suits. Suddenly, the best-dressed of them all appears from nowhere and, smiling, flings out his hand. It’s Nicky Logue, the InterContinental’s general manager, who has run the property for the past six years.
Hoteliers, especially five-star ones, are a fastidious bunch. They tend to be all shipshape and Bristol fashion, perfectionists, even nitpickers. The Clare man, as he later admits, is an exemplar of the species. He cannot walk past a crooked chair or fork without straightening it.
The great Guinness shortage has lessons for Diageo
Ireland has won the corporation tax game for now, but will that last?
Corkman leading €11bn development of Battersea Power Station in London: ‘We’ve created a place to live, work and play’
Elf doors, carriage rides and boat cruises: Christmas in Ireland’s five-star hotels
You can detect the meticulous urge in him as sits down to chat, all perfectly coiffed and turned out better than most of his guests (he has a penchant for Louis Copeland suits). A 3D-printed prototype of a five-star hotel manager might look something like Logue.
Yet there is also a lighter, effervescent side to him. Logue has a twinkle in his eye, a sense of mischief.
“An element of this job is serious but I actually love having the fun and the craic,” he says. “When I’m out with friends having a few drinks, I’m actually a giddy type of person. You don’t get the typical five-star persona all the time.”
Today we do. Logue, like many hoteliers, senses change in the air. The hotel sector is a mercurial industry, its fortunes rising and falling like the Assyrian Empire. It was booming immediately before the pandemic with tourism at record highs. Then it was plunged into a pit of darkness by the lockdowns of Covid-19, occasionally clambering out for brief respite in between periods of restrictions.
There was amazing value to be had early in the year, There were nights where you could have stayed here for €350, in a suite, with a bottle of champagne
Once the cycle of in-and-out lockdowns eased off in early 2022, the sector rebounded more strongly than anyone had anticipated and was soon back near 2019 levels. During the summer, the narrative flipped from despair to one of full hotels charging astronomical prices. Now that the energy crisis has hit, the sector is again on the front lines of the economic battle that looms. The Government is mulling axing the tourism sector’s special 9 per cent VAT rate in next week’s budget, sparking concern.
“The signals are not good. I genuinely believe 9 per cent is the right rate. A jump to 13.5 per cent is a 50 per cent increase in our VAT payments. With everything going on, it would be good if it could be left as it is and reviewed at a later point. If the 9 per cent goes, I’d like to think the Government will help business in other ways,” says Logue.
But hasn’t the hotel sector damaged its own standing in the debate by charging customers enormous rates for the last few available rooms, which tend to be the only ones for sale to most business and leisure travellers who haven’t long ago pre-booked as part of a larger group? Several Government politicians have used the term “price gouging”, and Paschal Donohoe, the Minister for Finance, says he will take it into account next week when deciding on the 9 per cent rate.
“There was amazing value to be had early in the year,” says Logue. “There were nights where you could have stayed here for €350, in a suite, with a bottle of champagne. As the months progressed, we had all this backlog of business from 2020 and 2021. There were nights where we were full and if we had only a few rooms left then, yes, the rates were high. But there is still value to be had.”
Weekend rates for the InterContinental for later this month and early next month are running at about €480 per room per night, without breakfast. It is not cheap. But for a five-star hotel 3km from the centre of town, it is not horrific either. Rooms for New Year’s Eve are currently available for €490 on Booking.com.
Logue estimates that more than 4,000 hotel rooms in the Greater Dublin Area may be unavailable to the public currently due to their use as temporary accommodation for refugees from Ukraine and elsewhere. The InterContinental, one of the capital’s plushest properties, does not sell rooms to the State for refugees. But the distorted effect on the market of taking so much capacity out of the public’s reach has, clearly, helped it to maintain lofty room rates.
The InterContinental’s financial performance is not publicly revealed by MHL. But Logue gives a sense of it. He says that occupancy rates for this year will be in or around the 70 per cent mark, which is about 10 percentage points down on 2019, the last full pre-pandemic year.
“But our rates are up because we have had some very strong months in the summer. Overall, our revenues for this year will be there or thereabouts with what we achieved in 2019.”
MHL may shield the hotel’s accounts from public view, but a flicker of light can be gleaned from the reported financial statements of an obscure company called Ballsbridge Leisure Investments. It appears to be linked to the majority ownership of Malone, the tycoon behind the Liberty Global cable company and Virgin Media television.
We have some good business on the books for 2023 but there is still work to be done
In its accounts, Ballsbridge Leisure Investments reveals that it is entitled to 0.1 per cent of the profits for the InterContinental. In 2019, it reported receiving €5,240. That suggests the hotel booked more than €5.2 million in profits that year. You would expect a hotel of its standard to generate annual revenues of up to €200,000 per available room in a buoyant market, which suggests it ought to run between €40 million and €50 million per year, perhaps higher on the back of its conferencing business.
“In coming months, things are plateauing out a little,” says Logue. “There has been what I would call a bit of a softening in that corporate market. The backlog of deferred business is not as plentiful now. We haven’t seen the levels in Q4 that we saw earlier in the year. We have some good business on the books for 2023 but there is still work to be done.”
The hotel derives about 50 per cent of its business from the US market, which is currently buoyed by the strong dollar versus the euro, Americans are also confounding predictions that the Ukraine war would prevent them travelling to Europe. On the day The Irish Times visited, the lobby was filled with American accents. Logue, like many other hoteliers in Dublin, is counting on strong US business plugging the gaps from any European slowdown caused by the energy crisis and a possible recession.
Logue has been steeped in the hotel industry all his life. His family hail from Ennis in Clare and his late father, Seamus, who died aged in his 50s in 2001, was for 25 years the restaurant manager of the Shannon Shamrock hotel in Bunratty. He later bought the Atlantic hotel in Lahinch, which is now run by Nicky’s brother, Alan Logue. Another brother, Derek Logue, runs the Bellbridge House Hotel at Spanish Point in Clare. Both brothers also operate other hospitality businesses in the area.
Inspired by watching his father work, Nicky Logue started in the industry on wash-up in the Queen’s hotel in Ennis at the age of 13, after lying about his age to the proprietor. He subsequently worked his way through all departments and later attended Shannon College of Hotel Management.
“I actually didn’t get into Shannon the first year. You needed two honours in the Leaving Certificate, and I only got one. So I took a year out and did French, and only French, at Bruce College in Limerick. I got the second honour and my French was really good going into Shannon.”
This helped Logue’s college work placements in Lausanne in Switzerland. He was hotel bar manager during his second-year placement there and a deputy general manager during his fourth-year stint, which was in the UK. He was promoted to general manager at the age of 22 before he had even graduated.
“I was told that was a first for Shannon,” he says.
After graduating, he worked as general manager for various hotels in Britain run by Irish-owned groups, such as Principal Hotels and Paramount Hotels. But after his father’s early death, he decided to return to Ireland, and became general manager in 2003 of the Fitzpatrick Group’s Killiney Castle hotel.
“There was a link to my father there because he had worked for the group for 25 years — the Shannon Shamrock was a Fitzpatrick hotel,” says Logue. For a moment, he stops in contemplation, before he takes up the tale of his career again.
After about 10 years, he left the Fitzpatrick group: “Killiney was great. But as time went on, other family members were growing up and getting involved. It was probably getting a bit crowded.” He became general manager for three years of the Gibson hotel near the 3Arena, before being headhunted by Lally and Higgins for MHL’s InterContinental in 2016, a year after the group had purchased it for about €54 million, reputedly outbidding Denis O’Brien. MHL’s other properties include the Powerscourt Hotel, the Westin in Dublin and the Strand hotel in Limerick.
Is Logue not exhausted after almost three decades as a general manager? He arrives in the hotel early each morning, usually hitting the gym, before working through to about 8pm each evening.
“There are days when it can be very stressful and very demanding and long. But I’m probably lucky in that I have this general positive outlook. If the guests are happy, that pleases me. A good night’s sleep and you’re ready to go again,” says Logue.
We’re going into a tough enough winter. We’re hoping the Government will come up with some assistance for the hospitality sector (on energy costs) because that is going to be needed. But we have to play our part as well
“I’m not an office GM. I love being on the floor. I try to delegate as much of the office work as I can. If I’m in the office for more than an hour I get anxious. You have to come in every day bouncing in. I know it sounds clichéd. But if I come in complaining that I’m exhausted or shattered, that will rub off on the team. You have to start every day afresh.”
He says he can’t see himself ever working at anything else.
“That is unless I owned a hotel. I’ve looked at a few things over the years and to be honest, it’s probably been a godsend that they didn’t happen. I looked at an opportunity once, right before the recession. I might have lost it if I had gone for it.”
For now, he is busy helping to do up the InterContinental’s financial budgets for the period ahead. He said its energy costs are up 80 per cent year-to-date, when compared to 2019 figures.
“We’re going into a tough enough winter. We’re hoping the Government will come up with some assistance for the hospitality sector (on energy costs) because that is going to be needed. But we have to play our part as well.”
The hotel has ordered new induction hobs for its kitchen, to replace some of the always-on gas rings. It is also in the process of changing every light fitting on the property to a lower-energy LED bulb.
“Look at the size of this hotel. It’s a fine build, but it eats energy.”
Would he consider turning down the heating for the winter, to save on gas?
“We definitely will not make it colder. MHL has invested a lot in this property since it bought it. There has been €2 million spent on it in 2022 alone, and we are going to do up the spa in January and February next year. When the guest is staying here, everything needs to be right. That includes the temperature.”
*********
Name: Nicky Logue
Job: General manager of the InterContinental hotel in Ballsbridge, Dublin 4
Age: 51
Home: Cabinteely, Dublin
Family: I have a super supportive partner in Cathal. We have been together for 18 years.
Something we might expect: He wears nice suits at work.
Something that might surprise: He was made a general manager before he had even graduated from college.
