Dalata plans Dublin marketing campaign as its hotels record €3.6m Q1 loss

Dalata, Ireland’s biggest hotel chain, says it is planning a marketing campaign to try to tempt domestic holidaymakers to visit Dublin this summer, as the capital’s hotels look set to underperform occupancy rates elsewhere.

"We will promote Dublin this summer and I believe Fáilte Ireland is also working on a campaign to do the same," said Dermot Crowley, the company's deputy chief executive, who will take over the top role from Pat McCann later this year.

“One of the things we have learned about Dublin in this pandemic is to look at the city in a different way. Between 50-65 per cent of hotel rooms filled in Dublin are from international travel, and if you take that away, it has an impact.”

Mr Crowley said that if international travel resumes in September, “Dublin will recover quickly because we see a lot of pent-up demand for leisure and corporate travel.”

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Virtual agm

Speaking after the company’s virtual agm on Thursday, Mr Crowley and Mr McCann said they were “delighted” with the Government’s accelerated economic reopening plan. Mr McCann said social distancing rules would not crimp capacity in Dalata hotels, which he said have large public spaces.

“Our teams are itching to get back,” he said.

In a trading statement on Thursday, Dalata said it made an earnings before interest, tax, depreciation and amortisation (ebitda) loss of €3.6 million in the first quarter of the year as its occupancy levels fell to as low as 14 per cent due to Covid-19 pandemic restrictions.

In a statement released to the stock market ahead of the company's agm, Dalata chairman John Hennessy said: "Since the start of January, our hotels have been closed to the general public, serving customers related to essential services only. For the first quarter of 2021, occupancies at our hotels were 14 per cent in Dublin, 16 per cent in regional Ireland and 13 per cent in the UK.

“We continue to minimise the impact of lower revenues through proactive cost control and availing of Government support. For the first quarter, the adjusted ebitda loss was €3.6 million.”

Debt facilities

Mr Hennessy told shareholders the company had cash and undrawn debt facilities of €272 million at the end of March. “The cash outflow of €21 million for the first quarter of 2021 is in line with our expectations,” he said.

Mr Hennessy expects hotels in the UK to reopen fully in the middle of May in line with the timetable set out by the government there. "The near-term outlook in Ireland is more uncertain but we remain encouraged by the acceleration of the vaccine rollout," he said. The Irish Government is to allow hotels to reopen in early June.

He added that the hotel group will continue to progress its development pipeline of close to 3,300 bedrooms. “We expect to open three new hotels before the end of this year,” he said.

Mr Crowley said the development of a handful of its UK hotels would be slowed by delays in developers obtaining financing, but he expects this problem to be solved later in the year.