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Choice Hotels chain aims for €65m turnover


Sitting on the dock of the bay: The Gibson hotel in Dublin's north docklands, close to The O2

Sitting on the dock of the bay: The Gibson hotel in Dublin's north docklands, close to The O2

Sitting on the dock of the bay: The Gibson hotel in Dublin's north docklands, close to The O2

Hotelier Frankie Whelehan, expects to increase turnover at his Choice Hotels group by €7m to €65m this year, thanks in part to the opening of the Gibson Hotel, the group's second hotel in Dublin's north docklands.

At a time when some Irish hotels are being sold off and others are in receivership, Choice is also achieving operating profits in each of its eight hotels, five of which trade under the Clarion brand.

Choice has leases on five hotels and management contracts on three others -- the Clarions at the IFSC and Dublin Airport as well as Carton House. In all cases Choice is making payments towards paying off the owners' bank debts. But Whelehan admits that the group would not have survived had it not been for the support of the landlords and their banks. He also briefs the National Asset Management Agency on the market.

"We had to negotiate substantial rent reductions, of up to 75pc in some cases, as well as redundancies. We have also cut our room rates. As a result of the downturn our turnover fell 35pc between 2007 and 2009," he adds.

A number of the hotels are owned by consortia of investors and beleaguered developer Paddy Kelly is a member of the consortia who own the Clarion hotels in the IFSC, Dublin Airport and Liffey Valley.

In addition, developer Harry Crosbie developed the 252-bed Gibson at a cost of €80m and he has been active in promoting it, so that many of the international entertainers who play The O2 stay at the Gibson, which is just a two-minute walk from the venue.

Mr Whelehan says he has no plans to expand the chain in Ireland despite opportunities that he has been offered.

"The only one we might consider would be a city-centre Dublin hotel provided it could fit in with our four-star business model," he adds.

Instead his expansion plans are focused on the UK and Germany. He has formed a joint venture company with another Irishman Peter Cashman who is a former managing director of Choice Hotels Europe and together they are seeking operating agreements for budget and four star hotels.

Last month they took over an 80-bedroom hotel in Wiesbaden, south of Frankfurt, and will operate it as a budget hotel under the Comfort Inn brand.

Next month they plan to take over another 80-bedroom budget hotel in Augsburg in Bavaria.

"We plan to take on another 10-12 hotels and this will also provide valuable experience and market knowledge before expanding into four stars in Germany," he adds.

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