Profits up 72% at Fitzpatrick’s US hotels

John Fitzpatrick’s two New York hotels increased their pre-tax profits by 72 per cent last year to $4.2 million (€3.75 million), helped by high average occupancy rates for the year of 90 per cent.

The strong bottom line performance of the Irishman’s hotels – the Fitzpatrick Manhattan and the Fitzpatrick Grand Central – was also helped by the non-recurrence of a one-off charge of $1.6 million in 2013 from loan refinancing.

Latest accounts for Fitzpatrick Hotels Ltd show turnover at the Manhattan hotels rose by 3.7 per cent to $26.2 million in the year to the end of September 2014. This was due to increases in domestic and international leisure travel.

Its operating profit rose by 13.4 per cent to $5.7 million. Net interest costs of just over $1.4 million gave it pre-tax profit of close to $4.3 million.

A tax charge of just under $1.3 million left it with an after-tax profit of $3 million. The company closed the year with shareholders’funds of $42.1 million.

Mr Fitzpatrick said the group is having another “strong” year in 2015.

Its occupancy rate is at record levels of about 92 per cent but average room rates are likely to soften by between 2 and 3 per cent as the supply of new rooms in New York outstrips demand and the strength of the dollar affects business from Europeans.

The group has taken some rooms out of circulation to facilitate a $2 million upgrade of televisions and IT and telephone systems, along with a refurbishment of its 91-bedroom property near Central Park.

Mr Fitzpatrick expects turnover in the current financial year to finish ahead of 2014 by between 1 and 2 per cent.

“We’re having a great year without highest ever occupancy rates but the room rate is a challenge because of the strong dollar, the addition of 11,000 new rooms in the city and we didn’t have the Super Bowl in New York this year,” Mr Fitzpatrick said.

“A lot will depend [on the outcome] of the next two months,” he said.

Mr Fitzpatrick said September should be a “bumper” month for the hotel sector in New York with Pope Francis due to address the UN General Assembly in the city and host Mass in Madison Square Garden.

Taoiseach Enda Kenny and President Michael D Higgins are expected to be in New York for the occasion.

The accounts show the net debt had reduced to $34.4 million at the end of September 2014 from $37.5 million a year earlier. Directors fees fell by 11 per cent to just more than $1 million.