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Dalata Hotels plans to focus on UK expansion

28 February 2017 by

Dalata Hotel Group, based in Dublin and London, plans to focus on expansion in the UK, as it enjoyed a "stronger than anticipated" start to 2017 there.

The news came as the group unveiled double-digit increases in revenue and profit in 2016.

The company, which has 41 hotels and 8,000 rooms and operates Ireland's two largest hotel brands, Clayton Hotels and Maldron Hotels, reported a 28.8% increase in revenue for the year to 31 December 2016 to €290.6m (£247.7m).

Profit before tax rose 55% to €44.1m (£37.6m), while adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 35.9% to €85.1m (£72.5m). Group revpar was up 14.9% to €80.20 (£68.35).

The company said that its EBITDA would have been even higher - to the tune of €3.3m (£2.8m) if the 2015 average exchange rate had applied in 2016.

In the first two months of 2017, the company said trading had been marginally ahead of expectations, with revpar growth in London, Northern Ireland and provincial UK properties stronger than anticipated.

It said it was now actively seeking opportunities to expand its presence in the UK… "Our focus is to build on our existing UK portfolio," it stated.

Currently, Dalata has a pipeline of 1,200 new rooms, with four hotels under construction, including two in Dublin, one in Belfast, one in Newcastle and a fifth planned for Cork. Last year, it opened seven hotels and around 1,600 rooms.

Dalata Group CEO Pat McCann said: "Given our ambition to grow in the large cities of provincial UK, I was particularly happy to see the extent to which we outperformed the market in terms of revpar growth in Manchester, Cardiff and Leeds.

"During 2016, we spent €150.9 million on a combination of leasehold and freehold interests of hotels new to the group, new leases, sites for new hotels and the freehold of hotels we previously leased. In all, seven hotels with around 1,600 rooms were added to the portfolio during the year. In addition, we have created a pipeline of 1,200 rooms in prime locations in Dublin, Cork, Belfast, Galway and Newcastle. These acquisitions and pipeline provide an engine of growth right through to the end of 2019.

"The addition of the Clayton Hotel Burlington Road to the portfolio in November 2016 was a very important milestone for the group for two reasons. Firstly, it allowed us to take over the operation of the largest hotel and conference venue in Dublin city centre. Secondly, it is clear evidence of how attractive the Dalata covenant is to international investors, which is important for our expansion plans in the UK. The hotel is now fully integrated into the group and the management team are implementing the Dalata decentralised model.

"I am already looking forward with enthusiasm to what we can achieve in 2017. We will continue to focus on improving returns from our current portfolio. We also intend to expand our hotel portfolio, particularly in the UK, seeking new or existing hotel opportunities which match our investment criteria."

Dalata to launch first UK Maldron hotel in Newcastle >>

Clayton hotel in Cardiff sold for £24m >>

Clayton Hotel Chiswick unveils £21m expansion >>

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