Dalata Extends Dublin Airport Deal As Ireland's Hotel Market Rebounds To Pre-Pandemic Levels
Ireland’s largest hotel group, Dalata, has agreed on a two-year extension of its licensing agreement for the 251-bedroom Maldron Hotel Dublin Airport.
Its existing agreement with the hotel's landlord had been due to expire this month.
The announcement comes as the Irish hotel industry returned to pre-pandemic performance levels in 2023, according to a report from Savills Ireland, which hailed a “cautious yet optimistic outlook” for 2024, with yields moving from 3.6% in early 2022 to around 4.75% to 5% now.
“The past year has been a period of significant recovery for the Irish hotel industry,” Savills Ireland Director and Head of Hotels and Leisure Tom Barrett said in a statement. “Occupancy rates have returned to their 2019 levels with even stronger pricing, reflecting the industry's adaptability and resilience.
“While we faced cost pressures across various sectors, including payroll and energy, the growth in top-line revenue has largely offset these challenges, making 2023 a positively memorable year for many hotel operators,” he added.
Forward bookings should also be boosted by major events such as the UEFA Europa League final and concerts by Taylor Swift and Coldplay. However, surpassing the €326 average rate achieved in Dublin during the Notre Dame v Navy American football game in August will be a challenge, Savills warned.
“The gap between buyer and vendor expectations has widened, influenced by frequent interest rate hikes throughout 2022 and 2023,” Barrett said of the investment landscape. “This has temporarily slowed down investment transactions in the Dublin hotel sector.”
Savills added that the Irish hotel market is likely to see significant transactions in 2024, including the completion of Press Up Hotels’ majority-stake sale to Lifestyle Hospitality Capital Group, the potential sale of Tifco Hotel Group’s portfolio and some off-market transactions.
Dalata is Ireland's largest hotel operator and has a growing presence in the UK and mainland Europe. Its portfolio comprises 53 three- and four-star hotels with 11,412 rooms and a pipeline of over 1,300 rooms. The company has 32 owned hotels, 18 leased hotels and three management contracts.
Dalata said in a 14 December trading update for the second half of 2023 that it expected hotel revenue to exceed €600M for 2023, which would mark a record high for the company. Dalata said its adjusted earnings before interest, taxes, depreciation and amortization for the year is expected to be more than €220M, up from €183M the previous year.
For the second half of 2023, the company said its group revenue per available room is also expected to be 3% ahead of 2022 levels.
Operations have begun at the three hotels added to the portfolio in 2023: Maldron Hotel Finsbury Park in London, Clayton Hotel London Wall and Clayton Hotel Amsterdam American.
Completion of four new hotels is planned for 2024, with Dalata’s first Brighton and Liverpool hotels, its fourth hotel in Manchester and its fifth hotel in London. This will add 834 rooms to the portfolio, with the hotels on track to open in mid-2024, according to the company.
Dalata CEO Dermot Crowley told Bisnow previously that development and acquisition in Ireland were likely to be opportunistic going forward.
The group said that it is optimistic for 2024 with strong lead indicators across its customer segments, including the return of more direct flight connections and the anticipated further recovery in corporate travel.
“In our recent first-half results, we set out our firepower potential of €750M to grow in the medium term beyond our currently announced pipeline,” Crowley said in a statement. “Since then, we have secured our second hotel in continental Europe with the addition of the newly rebranded Clayton Hotel Amsterdam American and the acquisition of our first site in Edinburgh where we will develop a four-star Clayton Hotel.”
