Tuesday 17 September 2019

Dalata boss ruling out Brexit boost in Budget

Dalata chief executive Pat McCann
Dalata chief executive Pat McCann
John Mulligan

John Mulligan

DALATA CEO Pat McCann has insisted it is "desperately unfair" that the highly profitable hotel group is used by the Government as the benchmark for the sector in Ireland.

And he doesn't think the tourism industry will see any major Brexit boost in next month's Budget, after the Government eliminated a special 9pc VAT rate for the sector last year.

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The special VAT rate, introduced in 2011 during the depths of the recession, was credited by the tourism industry with creating tens of thousands of jobs. Returning the rate to 13.5pc, the Revenue Commissioners reckoned, would generate an additional €527m for the Exchequer in a full year.

"I'm fed up with people saying we were lucky to get the VAT reduction for a period of time," said Mr McCann. "My argument is that the VAT rate should always be at that rate."

He said he "wouldn't be confident" that any fresh measure will be taken in respect of the VAT rate in the coming Budget.

"The problem for the industry is that it is judged on Dalata's results," he added. "That's desperately unfair, because we are not the industry. We operate differently, we're bigger, we have resources that the others don't have."

Mr McCann predicted that, by the end of the year, figures will show that some regions outside Dublin will have had reduced visitor numbers compared with 2018.

He cited Killarney as one of the areas which has not experienced a strong 2019.

Dalata is Ireland's biggest hotel group. Yesterday, it reported first-half results that beat analyst expectations, sending its shares more than 2.5pc higher in morning trade.

Its revenue rose 12.2pc to €201.9m, while adjusted earnings before interest, tax, depreciation and amortisation was 43.9pc higher at €73.4m.

The group had 8,790 owned and leased hotel rooms at the end of June, 4,487 in Dublin, 1,867 in regional Ireland, and 2,445 in the UK.

Dublin currently accounts for 58pc of its revenue. Dalata saw revenue per available room there dip 0.5pc in the first half of the year, compared with an industry decline of 1.4pc.

Mr McCann said that nudge lower was due to fewer events in the capital, particularly in May. However, he said that next year is shaping up to be "very decent", with events such as Uefa European Championship matches.

Dalata will open one hotel in London this year, one in Dublin next year and six new hotels in the UK in 2021.

Yesterday, it said it has acquired a site in London's Shoreditch for a new 130 to 140-bedroom Maldron hotel. Dalata paid about £32m (€35m) for the site, which was funded from debt. It will cost £28m to develop, which Mr McCann said would be financed from cashflow.

Irish Independent

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