Dromoland Castle group loses out on €400,000 Christmas party income due to Covid surge

Five-star hotel Dromoland Castle and a sister property have in recent days lost out on an estimated €400,000 in Christmas party income.

Dromoland's chief financial officer Joe Hughes said the Christmas party cancellations for the hotel and the neighbouring The Inn at Dromoland were sparked by the recent surge in Covid-19 cases and comments made by chief medical officer (CMO) Dr Tony Holohan this week.

Dr Holohan said cancelling social plans in the run up to Christmas was the responsible thing to do.

“Prior to the CMO’s comments, some companies had already cancelled their proposed gatherings, but the formal announcement crystallised smaller party group cancellations within 24 hours,” Mr Hughes said.

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He said that “the estimated total revenue shortfall would be around €400,000 across both hotels”, adding that around €250,000 of the cancellations had been made since Dr Holohan commented on Christmas parties earlier this week.

“Many of our colleagues in the industry are seeing substantial levels of Christmas party cancellations in the aftermath of the CMO’s announcement,” Mr Hughes said.

Christmas packages

Dromoland Castle’s Christmas residential packages for this year were booked out, Mr Hughes added.

Accounts for 2020 for Dromoland Castle and The Inn at Dromoland show the two hotels last year sustained a €15.7 million or 68.5 per cent revenue hit due to Covid-19 shutdowns.

Revenues at Dromoland Castle Holdings Ltd fell from €23 million to €7.23 million in 2020, while the company recorded a pretax loss of €3.3 million due to the pandemic.

The loss takes account of non-cash deprecation costs of €2.08 million and interest charges of €409,610.

The hotel company last year received €2.29 million in State Covid-19 wage subsidy scheme payments.

Revenues from rooms declined from €11.74 million to €2.87 million and food and drink revenues fell from €8.9 million to €3 million.

Mark Nolan, general manager at Dromoland Castle, said that the hotel "had a cliff fall off in revenues last year due to the pandemic".

However, Mr Nolan said that the biggest challenge in 2022 would be managing demand.

Mr Nolan said that 2022 “looks very good – it looks too good in spots. At the moment July is at 73 per cent occupancy already. It will churn, things will come off and come on.”

On the 2021 performance at Dromoland, Mr Hughes said: “We have performed above expectations.”

He said that last year “we were looking into the abyss, but right now, the road looks a lot better than it was 18 months ago”.

Mr Nolan said Dromoland had raised €5.3 million through issuing shares.

‘A helluva difference’

“They were over-subscribed which really made a helluva difference to us from a cash point of view. It hugely strengthened our balance sheet and we were very strongly positioned coming into the year with an extra €3 million in cash,” he said.

“Whatever blips there were this year, we were in a good position to see them out.”

At the end of December last, the company had shareholder funds of €19.8 million.

Numbers employed last year reduced from 401 to 179 and staff costs reduced from €9.66 million to €5.6 million.