Friday 17 August 2018

Dublin-based Choice working on deals with two 100-bedroom hotels in Ireland

The G Hotel in Galway
The G Hotel in Galway
John Mulligan

John Mulligan

Choice Hotel Group, which manages properties including Galway's five-star G Hotel, has been sizing up potential acquisitions in the UK and is also close to finalising the purchase of leases and properties in Ireland, according to CEO Andy O'Neill.

Choice manages or owns seven hotels, including one in Croydon, London.

In an interview with the Irish Independent, Mr O'Neill said that the Dublin-based company, of which he owns more than 90pc, is advanced on two deals in Ireland at the moment.

"We're very close on them. They will both operate as Clarions," said Mr O'Neill. Choice controls the franchise for Clarion, Comfort, Ascend and Quality brands in Ireland.

He declined to name the hotels involved, but said that Choice plans to buy to buy one and lease the other. Both are 100-bedroom hotels.

One is located in the west of Ireland and the other in the midlands. The company is also looking at a hotel on the east coast.

"We're working on those because we still believe there's a place for the Clarion brand and it has a lot of loyalty," said Mr O'Neill.

The Clarion brand hasn't been in use in Ireland since 2016.

While Mr O'Neill said Choice would like to have a property in Dublin, he said it's difficult to compete with companies such as Dalata - Ireland's biggest hotel group - and other capital-rich operators in the sector such as Tifco, which is up for sale by majority owner, Goldman Sachs with an estimated €600m price tag.

"It's not going to happen," he said. "We want to do Dublin, but we can't get value.

"There are too many senior capital players in that space. We're never going to compete at that level.

"We have to have to find our level. Before, we would have been able to compete with them."

At one stage during the boom, Choice was Ireland's biggest hotel group, with 24 properties in its portfolio.

While Mr O'Neill said that Choice is also interested in the UK market, it will also not be able to compete with Dalata there.

Last year, Dalata, headed by CEO Pat McCann, revealed its plans to become the largest operator of three- and four-star properties in 20 cities across the UK.

Dalata aims to add 8,000 bedrooms to its portfolio there within about seven years.

The stock market-listed group has highlighted cities such as Liverpool, Cambridge, York, Oxford and Edinburgh as being among those it's interested in.

"We're working on deals in the UK," said Mr O'Neill, adding that it's eyeing up leases and "one or two purchases with investors".

"Where we can afford to go and want to go is the regions [in the UK]," he said. "Where we've met Dalata there during an open sales process, we've walked."

He said Choice has been "actively looking" at seven or eight of the cities that Dalata is also targeting.

Mr O'Neill would like to have "three or four" hotels in the UK within a couple of years, and aims to have 10 properties in Ireland by the end of this year by early 2019.

He said he envisages Choice continuing to concentrate on smaller hotels rather than pursuing larger properties.

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