The chief executive of Ireland’s largest hotel operator said it “let customers down” after a systems error last week that led to the cancellation of room bookings at two of its Manchester hotels for the nights Oasis are due to play in the city next summer.
Dermot Crowley, chief executive of Dalata, again denied that the Maldron and Clayton brand operator deliberately cancelled room bookings and then resold them at a higher rate due to strong demand for the rooms following the confirmation of the band’s reunion tour on Tuesday, August 27th.
“It was absolutely not deliberate,” he said, speaking to The Irish Times following the publication of the group’s financial results for the first half of the year.
“In the hours before and after the Oasis concert dates were announced – really starting on the Monday afternoon – two of our Maldron hotels experienced a surge in bookings for what turned out to be the concert dates.”
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He said the volume of bookings “overwhelmed” the systems that manage communications between the group’s internal booking system and external online travel agencies (OTAs).
“There was a delay in messages going between the various systems,” Mr Crowley said. “What that actually resulted in was that our hotel system was saying it was full but that message wasn’t reaching the OTAs.”
Consequently, he said one of the hotels was overbooked by 911 rooms for one of the concert dates. Dalata then requested that customers begin cancelling the overbooked rooms, which “triggered” one of the online booking agencies to present the cancelled rooms at a higher price, Mr Crowley said. He said this lasted for just 12 minutes and only four rooms were booked at a higher price.
A spokeswoman for Dalata said last week it would not be honouring rooms booked at the higher prices.
Apologising again for the controversy on Wednesday, Mr Crowley said the hotel group needs to “look at [its] processes” and the systems in the wake of the incident.
“The worst thing for us is the impression that we deliberately cancelled bookings,” he said. “I can understand why people got that impression. But I can guarantee, we would never deliberately do that.”
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Dalata on Wednesday announced a €30 million share a buyback and recommended an interim dividend payment of 4.1 cent per share despite seeing more “measured” consumer behaviour in recent weeks.
In interim results published on Wednesday, the Dublin-listed group said revenue per available room (RevPar) – a key profitability metric in the hotel industry – grew by just 1 per cent in the six months to the end of June to €110.77.
Average room prices, meanwhile, increased by 2 per cent to €142.67 despite a slight decline in room occupancy levels from 78.4 per cent in the first half of 2023 to 77.6 per cent this year.
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In Dublin, Mr Crowley said the hotel sector has faced challenges in the past year with RevPar down 5.4 per cent across the market in the seven-month period to the end of July amid a 9 per cent increase in the number of rooms available in the city and the normalisation of the VAT rate for hospitality in September 2024.
Against this backdrop, he said Dalata was “delighted” to outperform the Dublin market with RevPar down just 4.6 per cent in the city over the period. Mr Crowley said room revenues in Dublin increased year on year by 5 per cent in August “on the back of a strong events calendar”.
The outlook for the Dublin market “remains very encouraging”, Mr Crowley said, supported by rising population figures and “strong international visitor numbers”.
Both in the UK and Ireland, Dalata said trading has been “softer” in recent times amid a return to more “measured domestic customer spending behaviour”.
This impacted business levels, particularly across Dalata’s regional Irish portfolio of hotels where RevPar declined slightly from €99.74 in the first half of 2023 to €97.71 in the first half of 2024.
However, he warned that the 32 million passenger per year cap at Dublin Airport, which DAA on Wednesday said will be surpassed in 2024, is an “important issue for business”. Mr Crowley said Dalata remains hopeful a resolution will be reached in the short term.
Announcing the new €30 million share buyback programme, Mr Crowley said Dalata is focused on “creating long-term value for our shareholders” and the group believes the time is right to return some value to them.
“We continue to deliver on our ambitious growth strategy, having successfully opened four new hotels in the UK between May and August,” he said. I am very proud of the results we have achieved to date which evidence our ability to deliver growth in the UK market, having expanded our UK portfolio from 11 to 22 hotels within three years.”
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