Dalata eyes mainland Europe expansion but UK still key focus

Listed hotels group Dalata is looking to achieve market share of between 8 to 10 per cent in the cities in which it is targeting in the UK, chief executive Pat McCann has said.

He added that the company also expects to be active in mainland Europe within five years “but is in no rush” to expand beyond its core markets.

Mr McCann was speaking following the group's agm in Dublin on Thursday at which he said Dalata has a pipeline of more than 2,190 rooms that it plans to open between late 2020 and mid-2021, in Bristol, Manchester, Glasgow, Birmingham and Dublin. The group started 2018 with 7,600 rooms and now has over 9,000 rooms, having opened the group's latest hotel, Clayton Hotel City of London, in January.

Overall, Dalata is looking at having a significant presence in 20 UK cities.

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Speaking to journalists after the agm, Mr McCann said the group had carried out a lot of research into other markets, in particular Germany. However, while saying he expects Dalata to expand into other countries within five years, he stressed that there was little to no chance of it happening over the next year or two.

“Don’t hold your breath. There is too much development opportunity currently that is attracting our attention and that’s where the focus is going to be,” said Mr McCann.

He said the group was eying “opportunistic deals” in the UK, but added that many hotels there were built in the 1980s and have to be demolished because they are not fit for purpose.

The Republic’s largest hotel chain said on Thursday that its trading performance in the first four months of 2019 was in line with expectations and ahead of the same period a year earlier.

Revenue per available room (revpar) in the Dublin market as a whole is on a par with last year for the first quarter, while on a “like for like” basis, revpar was up by 2.4 per cent. Revpar at the group’s UK hotels meanwhile was up by 3 per cent in the first quarter.

“We are going to outperform the market for 2019 and beyond,” said Mr McCann, adding that neither the recent VAT increase nor Brexit had greatly impacted the business.

Mr McCann again dismissed the idea of a need for a 1,000 room hotel in Dublin, as recently suggested by Fáilte Ireland. The 67-year old also again ruled out retiring anytime soon.