Dalata says its hotel valuations have now recovered to pre-Covid levels

Dalata, the Dublin-listed hotel operator behind the Maldron and Clayton brands, has reported that the valuation of its hotel estate has recovered to pre-Covids levels.

Last week Dalata released its results for its 2022 financial year, showing it recorded hotel revenue of €516m and adjusted earnings of €183m.

The group also recorded a net revaluation gain of €209.4m on the independent revaluation of its property assets at December 2022, bolstered by the more robust trading performance this year.

Speaking with the Sunday Independent, chief executive of Dalata Dermot Crowley said the company had enjoyed a more substantial recovery than many had anticipated. That recovery helped improve the trading performance and bolstered property valuations to levels last seen in 2019.

“When Covid hit, the outlook for the next few years was grim, which had an impact on the valuations of the hotels,” he said. “Now, after a very strong 2022, there is a good outlook for the next few years, and those valuations automatically recovered.

“If everything else had remained equal, they would have gone higher – but because of higher interest rates, you get higher discount rates, which feeds into that.

"It is beneficial, as it shows the strength of the balance sheet and the value for shareholders.”

In Dalata’s results, the company said hotel room supply in Dublin and regional Ireland continued to be “constrained”, with a significant number of rooms being used to provide emergency accommodation for refugees.

Crowley said Dalata had recently signed a three-month extension to a contract to provide 5pc of its rooms to the State.

“That doesn’t mean that come the end of May we’ll say there are no more rooms available,” he said.

“The reality is we have got 750 people staying with us. A lot of those are Ukrainians staying with us a year.

"We’re a large company; it isn’t a matter of saying we have no more space. We’re in a position where we won’t have to do that.

“Government was very good to the industry during the two years of Covid.”

Dalata said among its main priorities this year would be repaying its warehoused tax of around €34.8m.

“We employ over 4,000 people in the Republic of Ireland, and the industry is a huge employer here – so yes, warehousing tax was very helpful. We are happy to pay it back at this stage,” Crowley said. 

“The hotel business has gotten back to normal, so it’s the right thing to do.”

Last week, Dalata also said it had been exploring several opportunities in mainland Europe to possibly expand into – including Madrid, Barcelona, Berlin, Brussels, Amsterdam and Vienna.

Crowley said there were ambitions for further growth in the UK, with a presentation accompanying the results highlighting cities such as Edinburgh, York and Oxford as ‘targets’.

It also highlighted Glasgow, Manchester, Liverpool, Birmingham, Bristol, Cambridge, Brighton and London as target cities with either an existing Dalata hotel or a committed pipeline.

“By 2024, Dalata will have 5,000 rooms in the UK. We see an opportunity for another 5,000 rooms outside of London.”