Saturday 18 January 2020

Gresham profits soar to €4.5m as rates rise

Gresham Hotel in Dublin
Gresham Hotel in Dublin
John Mulligan

John Mulligan

The operating profit at the Gresham Hotel in Dublin - which was sold recently to Spain's Riu Hotels group for €92m - jumped 50pc to €4.5m last year as revenue climbed 15pc to €16.1m from €14m a year earlier.

The performance underscores the overall improvement in the capital's hotel sector, with a shortage of rooms leading to near full occupancy for many operators, as well as rising rates.

Directors at the iconic hotel noted that trading so far in 2016 has been "very strong" and "is out-performing both budget and the prior year".

The hotel was sold by Nama this year.

It was owned by Precinct Investments, which was controlled by builder Bryan Cullen.

A number of bidders had tabled bids for the property.

Riu, which is 49pc-owned by German travel group TUI, has named the Gresham one of its Plaza hotels.

The price paid by Riu Hotels was seen as steep by some operators, but the Spanish group has insisted it did not overpay for the property.

Accounts just filed for the Gresham, for 2015, note that its performance last year was boosted by a number of international events and conferences held in Dublin during the year.

They also show that the property generated revenue of €11.4m from its rooms during the year, with the cost of those sales amounting to €2m. That left the rooms generating a gross profit of£9.4m.

It has 323 rooms and suites, 20 function rooms, a restaurant and a bar.

Food and beverage sales at the hotel amounted to €4.4m, with the cost of those sales hitting €3.8m, leaving a €652,000 gross profit for that segment of the business.

The accounts also show that the Gresham paid €1.3m in commissions last year, up from €1.1m in 2014.

It also nearly doubled its advertising and promotion spend in 2015, to €249,000 from €129,000 the year before.

Salaries, wages and staff keep costs totalled €4.6m last year compared to €4.4m in 2014.

The Gresham is managed by Windward Management, a hotel group of which Patrick Coyle is the owner.

The accounts note that the Gresham paid a management fee of €282,000 last year, which was up from €260,000 in 2014.

Directors of the Gresham Hotel Company were paid a total of €332,000 last year.

Pre-tax profits at the iconic hotel soared to €41m in 2015 from €3m after it reversed €30.4m of intercompany receivables.

Riu Group has called the Gresham Hotel the "perfect addition" to its global group of properties. It's the first hotel the group has here.

Chief executive Luis Riu has previously said that the group might even look at further purchases in the capital.

"Its tourism industry is booming, demand for rooms rising and the city is putting a lot of money into its infrastructure," he said in September when the acquisition was completed.

"We are extremely pleased with the purchase of this hotel in one of the most beautiful European capitals," Mr Riu added.

Irish Independent

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