Dalata Hotel Group has announced that it expects its earnings to be in line with market expectations, despite “tougher than anticipated” market conditions during the year.
The group faced challenges in the Dublin market, with revenue down 3.2% for the 11 months ended November, compared to a 1.4% decline in the first half of the year.
VAT increase, an additional supply of hotel rooms and a reduction in the number of events in October and November all affected the Dublin market during the period.
Like-for-like revenue for the Regional Ireland portfolio fell by 0.7%, though Dalata says that it “performed well” in light of the VAT increase that impacted this market.
Despite the group’s Ireland results, however, the UK portfolio “continued to perform very strongly” during the period.
Its UK hotels enjoyed a like-for-like revenue growth of 3%, while regional city hotels performed “particularly well”.
Despite the softer market conditions in Ireland, Dalata says that strong cost control, alongside hotel openings or extensions, has ensured that group EBITDA will be in line with market expectations.
Dermot Crowley, deputy CEO, business development and finance, said: “I am pleased with the performance of our hotels in 2019. Our Regional UK hotels have had a strong performance to date in 2019 and exceeded the market growth in all of the cities in which they operate.
“This result is very encouraging for our growth strategy in the UK. Our London hotels have also performed very strongly in their local areas.
“Considering the considerable once off impact of the substantial increase in VAT together with increased supply in Dublin, I am happy that our Irish hotels have managed to protect their margins and help the group as a whole meet market expectations on EBITDA performance.”
He added: “We look forward with confidence to 2020. We expect to see the continued very positive impact of the seven hotels opened or acquired in the last 18 months.
“We have a modern, young and well invested portfolio of hotels that are run by highly trained and motivated Dalata teams. This puts us in a very strong position versus our competition as we head into 2020.
“Although supply continues to increase in Dublin, strong economic indicators for Ireland as a whole and an improved calendar of events in the city will help us to continue to grow profitably in the months ahead.”