Dalata announces strategic review to explore sale options

Dalata hotel group is to undertake a strategic review ahead of a potential sale of the business.

The announcement came as Ireland’s largest hotel group reported record revenue for 2024 of €652.2m (£546.2m) up 7.3% on 2023 and adjusted earnings before interest, taxes, depreciation and amortisation of €234.5m (£196.4m), up 5.1% on 2023.

Despite these figures, pre-tax profits for the year stood at €78.7m (£65.9m), down 12.7% on 2023.

The group has pursued ambitious expansion in recent years and is targeting a portfolio of 21,000 rooms by 2030 focused on the UK and large European cities.

Chairman John Hennessy said: “The board is excited about the 2030 Vision that was outlined by our senior management team at our Capital Markets Day in October 2024.

“However, we are unanimous in the view that the key to achieving that vision is the availability of capital and that the share price does not reflect the underlying value of the company. We believe that now is the right time to undertake a rigorous and formal strategic review, which will consider options to increase access to capital and also enhance shareholder value.”

Dalata has a portfolio of 55 hotels, including 30 owned properties valued at €1.7b (£1.4b). It also has 22 leased hotels and three managed hotels.

The majority of the hotels are in Dublin and London and operate under its two brands Clayton (pictured in Cardiff) and Maldron.

Rothschild & Co has been tasked with reviewing options to optimise the value the assets deliver for shareholders. Options to be considered will include continuing with the group’s existing strategy, commencing a formal sale process or seeking a merger.

Dalata said it is not in discussions with other parties at this time and Hennessy will continue to lead the group.

The group added that it had seen a strong start to 2025 with group revenue per available room set to be 2.5% ahead of first quarter expectations.

When minimum wage and National Insurance increases come into force in April, the group will see its payroll bill increase by 5%. However, Dalata said it believed it can compensate for this through efficiencies.

Chief executive Dermot Crowley added: “Our 2030 Vision strategy sets an exciting goal to have 21,000 rooms either operational or under construction by 2030. We have an excellent management platform in place to deliver this strategy, but access to capital is essential to achieve our vision.

“A thorough strategic review will enable us to assess available options to increase our access to capital and enhance shareholder value. During the process we will remain focused on the underlying business – continuing to take care of our people and continuing to meet the expectations of our customers.

“We have exciting initiatives in place to enhance further our revenues and deliver further productivity – our teams will remain focused on delivering on the objectives that we have set ourselves for 2025.”