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Dalata in talks to buy hotels it runs for receivers

The Dalata hotel group -- which is headed by former Jurys Doyle boss Pat McCann and operates the Maldron brand -- has had exploratory talks about acquiring some high-profile hotels around the country that it manages on behalf of receivers.

Mr McCann confirmed the preliminary discussions in an interview with the Irish Independent, adding that Dalata was interested in acquiring some of the properties, which he described as "very good assets".

Apart from owning 11 hotels in Ireland that it operates under the Maldron name, Dalata also has a Maldron hotel in Cardiff and has contracts to run 11 hotels on behalf of receivers.

Among the latter are Whites of Wexford, the Heritage Hotel in Portlaoise, Citywest Hotel in Dublin and the Clayton Hotel in Galway.

The Maldron boss said there were "creative ways" of doing deals with receivers, but would not be drawn on whether one of those avenues would include assuming some of the debt attached to the businesses.

"There could be creative ways in how we could take on those assets," he said, adding that it remained "very early days" in terms of negotiations and that some banks would probably hold off making any immediate moves as they waited to see if there was any recovery in the sector.

"We're looking at a solution, the banks need a solution, and maybe somewhere in the middle the two of us can meet," Mr McCann said.

He also declined to specify which properties he might be most interested in.

Mr McCann also said many hotels built on the periphery of the M50 around Dublin probably had a fairly bleak outlook and might not survive the downturn.

"The market will dictate whether hotels stay open or close," he said. "If they can't sustain themselves in some form, then you'll eventually see them close. Unfortunately, you don't have alternative uses for a lot of those hotels."

He added that occupancy rates in general in Dublin city had held firm, however, helped by extra corporate business.


Mr McCann said Dalata's cost base had not fallen as significantly as revenues.

"That's always going to be a challenge. We're still paying the prices we were back in 2007 or 2008 and yet our room rates have fallen significantly and we still have the minimum wage, although I don't have a real problem with that," he said.

The chief executive said that Joint Labour Committee (JLC) pay rates for the sector, which apply to staff working nights and weekends, were a "nonsense". The higher rates don't apply in Dublin or Cork.

"Businesses are penalised in a different way under JLCs and in my view they've more than served their time and don't make sense," he added.

Tanaiste Eamon Gilmore said yesterday at the Irish Congress of Trade Unions' conference that the JLCs would not be abolished completely, although the system would be reformed.

Interview, Page 5

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