Business Irish

Friday 20 September 2019

Debts push Lynch Hotel Group into examinership

Family-run business has 'reasonable survival prospect' despite owing €22.85m

The Breaffy Hotel with spa in Castlebar has not performed as well as expected.
The Breaffy Hotel with spa in Castlebar has not performed as well as expected.
Happier days in 2005 when the then Tanaiste Mary Harney performed the offical opening of the €30m revamped Green Isle Hotel, since sold on, with Michael B Lynch, managing director of the group

Thomas Molloy and Tim Healy

THE Lynch Hotel Group, which employs 530 people in seven hotels in the west, gained court protection from its creditors yesterday as it tries to re-organise its finances.

Judge Mary Finlay Geoghegan appointed Michael McAteer of Grant Thornton as interim examiner of Ireland's largest family-run hotel group.

The judge made the appointment after being told that an independent accountant's report showed that the group has a reasonable prospect of survival as a going concern.


The examinership gives the company 100 days to reorganise its finances. The court heard that the group owes €22.85m and is unable to pay its debts.

The hotel industry is suffering one of the worst years on record as the recession discourages hotel visitors and a glut of new hotels, inspired by tax incentives, keeps room prices down. Insolvency Journal says one in six of the insolvencies reported in Ireland this year are in the hospitality sector.

All pre-booked events, weddings and leisure bookings throughout the Lynch Group are secure and will proceed as planned, the company said in a press release.

The 41-year-old hotel group was set up by Michael and Christina Lynch in Ennis and has since expanded further in Clare and into Mayo, Limerick and Galway. Mr Lynch, who is 81, remains a director but the company is now run by his 40-year-old son, Michael B Lynch, a former finalist in the Ernst and Young Entrepreneur of the Year competition.

"We are professional hoteliers with a fundamentally sound business and at this time are planning to restructure our financial position," Michael B Lynch said yesterday.

"We are confident that our 40 years of experience in the hotel business, our customer and staff loyalty and recognised innovation practices will see the company through this process."

Those innovative practices include a nationwide campaign to give hotel rooms to SuperValu customers who collect tokens to spend nights away from home.

The hotel group pulled out of Dublin last year, selling the 270-bedroom Green Isle hotel at a €10m loss for €40m. It also sold the South Court Hotel in Limerick for an estimated €15m and then leased the 127-bedroom building back.

Last year it opened a luxurious family-friendly spa at the Breaffy House Hotel in Castlebar which the court heard was not performing as well as hoped. Other hotels in the group include the George Boutique Hotel in Limerick City and Haydens Gateway Hotel in Ballinasloe.

Mr Lynch lost out two years ago in a bid to win a radio licence for the region as part of a consortium which included pub owner Louis Fitzgerald and Merrion Stockbrokers boss John Conroy.

The main creditors are the Revenue Commissioners, AIB, Bank Of Scotland (Ireland), Bank of Ireland, Diageo Ireland and Celtic Linen Ltd.

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