Dalata says UK remains a 'strategic priority' for hotel expansion

Ireland’s largest hotel operator Dalata has said it will continue to expand in the UK and Europe off the back of strong financial results.

The group, which is behind the Clayton and Maldron brands, saw revenue grow 18% to €608m (£520m) in 2023.

Adjusted EBITDA rose 22% to €223m (£191m), matching the margin achieved in 2019 despite additional cost pressures.

However, pre-tax profits dipped from €200m (£171m) in 2022 to €106m (£91m) last year.

Shane Casserly, corporate development director, told investors the UK remained a “strategic priority” for Dalata and it was also targeting large European cities with a mix of corporate and leisure demand.

Dalata has a development pipeline of 1,500 rooms, including a proposed 216-bedroom extension to its Clayton Hotel Manchester Airport and the conversion of offices in Edinburgh to a 167-bedroom hotel.

It said it expects its number of UK rooms to exceed 5,000 by end of 2024 with the opening of centrally located hotels in London, Liverpool, Brighton and Manchester.

The group saw revenue per available room (RevPAR) increase to €114.67 (£98.21) , up from €102.23 (£87.56) in 2022. Average room rate reached €143.36 (£122.79), up from €134.80 (£115.46) in 2022. Occupancy stood at 80%, compared to 76% the previous year.

Dalata warned that January and February 2024 had seen an 4% dip in like-for-like RevPAR. However, chief executive Dermot Crowley said he remained “optimistic” for the year and the addition of 1,800 rooms to the group's Dublin portfolio had contributed to the drop.

Dalata’s results announcement coincided with the launch of its refreshed brand, which it said reflected “what Dalata is all about – engaged teams passionate about our hospitality and customer service”.

The group’s Clayton and Maldron brands will undergo a relaunch in the second quarter of the year.

Crowley said the group had responded to challenges facing the industry, in particular increased wage costs across Ireland and the UK.

He added: “We have achieved a notable increase in productivity by streamlining work practices within our accommodation and kitchens which is critical given the significant increase in minimum wage rates in Ireland and the UK.

“The productivity increases were achieved whilst also increasing employee satisfaction levels in those departments. We will continue to use innovation and technology to find smarter ways to deliver what our guests are looking for at our hotels.”