Dalata may make earlier-than-expected move into Germany
The Dalata Hotel Group may make an earlier-than-planned move into continental Europe in order to test conditions ahead of a larger expansion drive in the coming years.
Ireland's largest hotel operator, and owner of the twin Clayton and Maldron brands, remains focused on building its UK business for now. Last year the group said it would target a move into Germany and the Benelux countries over the next decade.
However, speaking on the back of strong annual results, deputy chief executive Dermot Crowley said an initial move into mainland Europe could be closer than thought. He said a meaningful expansion remains some years off, but the group would be open to making an initial single hotel investment - most probably in Germany - if the opportunity arose, in order to better gauge market conditions.
Dalata is currently researching supply and demand dynamics in Germany and is targeting most of the country's main cities including Berlin, Munich, Cologne, Hamburg, Dusseldorf and Stuttgart.
Dalata has opened six hotels in Ireland and the UK in the last 12 months and has another eight in the pipeline between now and 2021. By then, it will have around 16 UK hotels and nearly 50 in total. Despite largely focusing on regional UK cities, Dalata is looking at further opportunities in London after completing a hotel deal in the City of London last month.
The group grew pre-tax profits last year by 13% to €87.3m, while revenues jumped nearly 12% to €393.7m. A first full year dividend of 10c per share was declared. It also announced plans for an expansion of its Cardiff Lane Clayton Hotel in Dublin after buying adjacent land for €5.5m. Dalata's shares rose by close to 5% on the results and lessening fears of a no-deal Brexit.
Mr Crowley said Brexit uncertainty has had no impact on Dalata's trading, with only 15% of visitors to its Dublin hotels - and 8% to its regional Irish properties - coming from the UK, while North American visitor numbers have grown.
"If it's not a no-deal outcome, I think it will continue to be business as normal," he said.
He also said it remains too early to judge the effect of the Vat rate for the hospitality sector returning to 13.5% from 9%, but admitted the move would impact less on Dalata than smaller industry players.
Dalata remains hopeful of becoming the operator of the new hotel planned for the site of the current Ballsbridge Hotel in Dublin - which the group already runs on a managed basis - but has lost out in the running for a new Dublin Airport hotel.
