Mespil bucks this dire trend by
Published 21/08/2010 | 05:00
the Mespil Hotel, located in Dublin 4, has bucked the trend of loss-making establishments by posting a profit and even managing to pay out a dividend to its owners.
The 255-bedroom hotel on Mespil Road is one of the few properties managing to stay in positive territory, with even five-star hotels like the Merrion, in the heart of Dublin, plunging into the red.
Latest accounts show the company turned in a profit of €346,072, with a payout of €240,000 to its owners.
Such a performance is almost unique for hotels in the current climate, with properties slashing their rates and some even going into NAMA.
The hotel said it had a profitable year "despite a significant downturn in the tourism sector".
"The directors believe that the company is well placed to meet the challenges ahead in the sector."
The owners have €19m tied up in the business after several years of profits.
While the results buck the trend, even the Mespil saw its position worsen during 2009, a bleak year for the hotel industry. During that year its profit dropped to €346,072 from €1.9m. The hotel is part of the Lee Hotel Group, which also owns the Sligo Park Hotel.
Ironically, the hotel has availed of loans from Bank of Scotland (Ireland) which this week confirmed plans to leave the Irish market. However, unlike many other hotels, the Mespil also has a banking relationship with Allied Irish Banks.
A report published earlier this year -- commissioned by the Irish Hotels Federation -- said that in "aggregate" the whole hotel sector was insolvent, with some hotels insolvent from the day they opened.
This is because, between 1999 and 2008, some 26,802 new rooms came on stream, based on an investment of €5.2bn. The report by economist Peter Bacon said newer hotels were "seriously insolvent".
In the period between 2005 and 2008, 217 hotels alone were built, throwing another 15,600 rooms on to an already congested market, said Mr Bacon.
Some hotels have resorted to slashing room rates to drum up business, with Sean Dunne's D4 hotels in Ballsbridge among the properties which have cut prices sharply.