Dalata plans to add 8,000 rooms as it tar­gets UK

Irish Independent - Business Week - - BUSINESSWEEK - John Mul­li­gan

IRE­LAND’S big­gest ho­tel op­er­a­tor, Dalata, is aim­ing to be­come the largest op­er­a­tor of three- and four-star prop­er­ties in 20 cities across the United King­dom.

It hopes to add an­other 8,000 bed­rooms to its port­fo­lio there over the next five to seven years, it has told in­vestors.

Dalata has pin­pointed sig­nif­i­cant ex­pan­sion op­por­tu­ni­ties for the com­pany in cities in­clud­ing Ed­in­burgh, Ox­ford, Liver­pool, Cam­bridge and York.

It aims to take ad­van­tage of what it said is a “very frag­mented” UK re­gional ho­tel sec­tor and cap­ture be­tween 10pc and 15pc of the market in each of the 20 cities it’s tar­get­ing.

The ho­tel group has also told in­vestors that while Brexit poses a risk to the economies of the cities it’s aim­ing to ex­pand in, it be­lieves a struc­tural shift in the ho­tel in­dus­try, as in­ter­na­tional brands leave re­gional lo­ca­tions, poses a greater op­por­tu­nity.

Dalata, whose CEO is Pat McCann, al­ready has a to­tal of eight ho­tels in UK cities in­clud­ing Lon­don Manch­ester, Leeds, Belfast, Cardiff and Birm­ing­ham.

They are three- and four-star prop­er­ties and in­clude a to­tal of 1,700 bed­rooms. It has two prop­er­ties in Lon­don but is not aim­ing to ex­pand there ex­cept on an op­por­tunis­tic ba­sis.

This week, Dalata an­nounced that has agreed to lease what will be a new Clay­ton Ho­tel in Glas­gow. The four-star ho­tel, which has yet to re­ceive plan­ning per­mis­sion, will be built by Ar­ti­san Real Estate In­vestors and have about 300 bed­rooms. It’s in­tended that the prop­erty will open at the end of 2020.

Dalata an­nounced last year that it se­cured a 35-year agree­ment to lease what will be a new Mal­dron Ho­tel that’s be­ing built in New­cas­tle by a unit of McAleer & Rushe.

The four-star ho­tel, which will have 226 bed­rooms, will open next year.

Other cities be­ing tar­geted for growth by Dalata in the UK in­clude Bristol, Bournemouth and Southamp­ton.

Dalata aims to have a to­tal of 2,500 bed­rooms in the UK by 2020, deputy chief ex­ec­u­tive Der­mot Crow­ley con­firmed to in­vestors this week.

He added that all of Dalata’s ho­tels in the UK are per­form­ing well, with rev­enue per avail­able room dur­ing the first half of the year up about 14.6pc.

He said the group’s UK busi­ness had also seen a strong in­crease in its earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and rent costs mar­gin, from 35.6pc to 38pc year-on-year.

Dalata said that the over­all ho­tel market in large re­gional UK cities is “very frag­mented”.

“Only bud­get brands have a sig­nif­i­cant market share,” it added. “The spe­cific three and four-star market in cer­tain large re­gional cities is very frag­mented and there are no dom­i­nant brands in this market seg­ment.”

It added that more than 70pc of re­gional ho­tel owner-op­er­a­tors have four ho­tels or fewer in their port­fo­lios, while op­er­a­tors each with a market share of less than 4pc, com­prise 70pc of the re­gional three- and four-star market in the UK.

Dalata, which owns or leases 35 ho­tels in Ire­land and the UK, has tar­geted 20 Bri­tish cities

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