Westin Hotel benefits from its own form of 'debt forgiveness'
Deal leads to bumper profit after owner US Starwood Hotels and Resorts waives right to be repaid €24m in loans
The five-star Westin Hotel in the centre of Dublin has reported one of the largest profits of any hotel in the city, after its owners "forgave" the €24m it had invested in the business.
The hotel, near College Green, is owned by US Starwood Hotels and Resorts, one of the largest chains in the world. It was owed €21.4m in loans and €2.5m in interest by the Dublin hotel, but has now waived all rights to be repaid.
In turn the Westin itself, known as Westin Hotels Ireland Ltd, has booked the amounts written off as a profit.
"The forgiveness of these balances has been treated as an exceptional gain by the company," states its latest accounts.
The release of the Westin from repaying these sums alters the profit-and-loss account of the hotel dramatically. A gross profit of €4.7m is transformed into a profit of €20.06m by the exceptional gain from the debt deal.
The balance sheet of the company also gains, with last year's deficit in shareholders' funds dropping from €31.3m to €11.7m.
In terms of the operation of the hotel itself, sales dropped by about €1m to €10.5m, but cost reductions are under way as the hotel, like many in its pricing bracket, makes adjustments to remain in the black.
"The tax burden has increased on the Irish public and wages remained unchanged or reduced, seriously affecting public spending power on the tourist industry."
"The main market feeders such as the US, UK and mainland Europe had to face similar constraints limiting the ability for their citizens to travel," state the accounts.
"The directors are satisfied with the cost-saving initiatives put in place by management and are hopeful that trading will improve in future years," they add.
The landlord to the property is Treasury Holdings, founded by Richard Barrett and Johnny Ronan.
The lease charges are expected to come to €4.6m in the year ahead, the directors note. The lease runs until August 2026 and it began in September 2001.
Meanwhile, another city centre hotel, Wynns Hotel, has reported a small profit for the year of €54,932.
This was a reversal of a small loss in the previous year. The hotel is located close to O'Connell Street.