Fitzpatrick Hotels records 31% rise in operating profit

The two New York hotels owned by Irishman John Fitzpatrick increased their operating profit by 31 per cent last year to just more than $5 million (€3.75 million), driven by increased business from international leisure markets and a record average room occupancy rate of 89 per cent.

Accounts just filed for Fitzpatrick Hotels Ltd for the year to the end of September 2013, which have been provided to The Irish Times, show its turnover rose 6.2 per cent to $25.3 million.

The company, which operates the Fitzpatrick Manhattan and the Fitzpatrick Grand Central hotels, recorded an after-tax profit of $1.8 million, down from $2.3 million in the previous year. This was due to once-off costs associated with switching its loans to a new bank.

Leisure market

Peter Kidd

, chief financial officer of Fitzpatrick Hotels, said the company had experienced good growth from the leisure market.

“The UK was particularly strong last year while another big component was increased revenues from the Brazil market,” he said. “Brazil has probably been the fastest-growing market into New York city for five years up to this year.”

He also noted that the numbers visiting New York city last year rose 4.6 per cent to 54 million, which included 11.4 million international visitors.

No dividend was paid by the company to Mr Fitzpatrick last year, unlike the previous period, when he received a payment of $240,000.

Mr Kidd is forecasting turnover growth of 2.5 per cent to 3 per cent for the current financial year, which has about five weeks to run. Profits are likely to rise by 3 per cent to 5 per cent, he added.

He said its average room rate would nudge up to about $290 this year from $288 in the financial year just past, while the company recorded a record 98 per cent occupancy rate in June at its Grand Central property.

Loans restructured

Fitzpatrick Hotels also restructured its loans last year. It achieved a discount of 15.4 per cent or $6.9 million on the $44.9 million principal sum that was due at the time to

Bank of Scotland

(Ireland), which is exiting this market. It replaced this with a $43 million loan from US-based M&T Bank, in which AIB was once a significant shareholder. Its net debt at the end of September 2013 was $37.5 million.

Separately, the accounts state that during the year Jolly Tinker Inc, an associated company, cancelled €7 million in advances owed by Fitz Management LLC, an entity controlled by Mr Fitzpatrick. At the end of September 2013, Fitz Management owed $10.5 million to Jolly Tinker.

Mr Kidd said the company plans to update all 91 bedrooms in the Fitzpatrick Manhattan hotel on a phased basis, beginning in January.