Montrose owners propose budget rooms rescue plan

THE OWNERS of the long-established Montrose Hotel in Dublin, which has been shut since January, plan to reopen it as a budget hotel employing fewer staff on lower wages.

Most of the 100 staff in the hotel would lose their jobs and receive the minimum statutory redundancy payments, under the plan put forward by the owners, Lonnegan Trading Company Ltd.

The hotel was closed because of poor bookings and mounting losses.

Staff were told it would remain shut for at least three months, during which time the building would be renovated.

To date, no renovations have taken place and discussions between Lonnegan directors, property consultant David Courtney and accountant Padraig Breen, and staff representatives are continuing over a rescue package.

The directors have proposed reopening the hotel as a budget establishment employing 30 staff. The restaurants and kitchens would be closed and their staff, along with other hotel staff, would be offered the minimum statutory redundancy terms.

They are also proposing to abolish the payments previously made to staff from service charges levied on guests. These had fallen in recent years because the hotel was doing less business.

Staff in the new hotel would be paid slightly more than the minimum wage of less than €10 an hour at a flat rate, and would have to agree to new contracts allowing redeployment between different work areas. The former restaurants would be converted into retail units and the new hotel would restrict its offering to bed and breakfast.

Union representatives have rejected the management proposals and are seeking payment of 3.5 weeks’ redundancy pay for every year’s service, including statutory provision. A number of meetings have failed to resolve the impasse, but both sides say they expect developments in the coming weeks.

A management source told The Irish Timesyesterday that talks with staff representatives were continuing and the chances of a deal were 50:50.

Even if agreement was reached, the reopening of the hotel would be conditional on the owners being able to raise the finances needed to renovate the building.

He said it was unlikely that the hotel would reopen before June or July at the earliest.

The owners were trying to honour their obligations to staff by reopening the business but they had run out of money and were not in a financial position to make redundancy payments, he added.

Staff say the owners have told them they intend to ask Anglo Irish Bank, which loaned the money for the purchase of the hotel, to fund the renovation.