Dalata Hotel Group has said it expects revenue to fall by 16% in the quarter ended March 2020 amid the ongoing coronavirus crisis.
It said that the “combination of events” in recent times has “severely impacted” the business over the last two weeks, and it expects that to continue for as long as the current restrictions on movement and travel remain.
The group said that its reduction in bookings has seen a “material acceleration” due to cancelled events and travel restrictions, as well as government restrictions and guidelines on hotel operations.
In accordance with these guidelines, Dalata will temporarily close several of its hotels in Ireland and the UK over the next few days and “significantly reduce” operating capacity at its remaining hotels.
To further preserve cash, the group has reduced working hours for some employees and introduced a “progressive, temporary reduction” of basic salary for those whose hours have not been reduced, while the board has also taken reductions in basic pay.
However, the group said that it has “unfortunately” had to “temporarily lay off a large number of employees for whom we currently have no work”.
In a statement, the group added: “Dalata welcomes the income support initiatives announced by the Irish and UK governments in response to the Covid- 19 outbreak.
“The group will seek to avail of these schemes and retain the link between these employees and Dalata. These staff members remain part of the Dalata team and the group looks forward to welcoming them back to work as soon as our business recovers.”
Due to the continued “uncertain outlook”, the group has also decided to withdraw its proposed final dividend of 7.25c per share.
Pat McCann, CEO of Dalata said: “This is an unprecedented situation, and we are working hard to mitigate the implications for our business. Our primary focus is on protecting our people, protecting our business and protecting our cash.
“We are looking to share the impact of the current crisis fairly between all stakeholders. The withdrawal of the proposed dividend and the recent fall in the share price is having a significant impact on our shareholders.”
He added: “All our people will suffer income loss through either layoffs, reduced working hours or salary cuts. Likewise, our board is cutting its remuneration. We will be working with our other stakeholders to examine ways in which we can further protect our financial position in a fair and equitable manner.
“While we have never experienced something of the magnitude of the Covid-19 outbreak before, we are well positioned to manage our way through this crisis over the coming months.”