Business Irish

Tuesday 25 September 2018

Pat McDonagh interview: Dublin hotel market too racy for fast food chief's new empire

 

Supermac's boss Pat McDonagh
Supermac's boss Pat McDonagh
Louise Kelly

Louise Kelly

Seeing a risk that Dublin hotels are pricing themselves out of the market is enough to keep one of the country's leading business families out of the accommodation market in the capital.

Supermac's has long since broken into Dublin, and its battle for expansion in Europe is ongoing - despite the high-profile intervention from the fast-food chain's arch nemesis - but going international is not on the agenda for its owners' growing hotel empire.

Pat McDonagh, founder and CEO of the Galway-based fast-food operator, and his wife Una recently snapped up the four-star Athlone Springs Hotel in Roscommon, adding it to a portfolio of four-star properties that includes Galway's Lough Rea Hotel and Spa, Limerick's Castletroy Park Hotel, the Killeshin Hotel in Portlaoise and the Charleville Park Hotel in Cork.

"We've been looking at a number of hotels, but Athlone Springs really fits into the range and compass of what we're looking for," McDonagh said.

A €6m redevelopment for the Limerick site, announced last summer, is under way and will increase the size of the hotel by almost 50pc.

The Killeshin was redeveloped over the past year with a new lobby, restaurant, bar, ballroom and the executive suites getting an upgrade.

The McDonaghs' hotel chain, in common with the likes of Dalata, Tifco and iNua is a post-crash phenomenon. Unlike some of those rivals, Pat McDonagh has avoided expansion overseas or even into Dublin.

"We're not looking at acquiring hotels abroad; there it's a whole different ballgame. You've to have a very good team in place on the ground, you can't just drive down the road for negotiations. There's a lot of uncertainties abroad in relation so, for us, the stability in Ireland is very important."

While it might just be a hop, skip and a jump down the motorway to the capital, however, McDonagh is happy to stay in the west and the midlands.

"An area for concern for us is the amount hotels are charging for their rooms, are they becoming too expensive?

"Are Dublin prices at breaking point, and are we losing business because of that? Tour operators are not going to be paying through the nose when it comes to including those hotel costs; the danger is we'll seriously damage our tourist industry."

Having opened its doors in July 2007, the 68-bedroom Athlone Springs was placed on the market a decade later with a guide price of more than €3.5m.

Located close to the M6 Dublin-Galway link, the hotel already consists of an on-site leisure centre, restaurant and bar and a function room that can cater for up to 500 guests.

But the development "has gotten a bit tired", according to McDonagh, and it will take in excess of €1m to €1.5m of reinvestment to give it the face-lift it needs.

"There's quite an amount to be done as soon as we're given the green light to go ahead. From the ballroom to the bedrooms to the leisure centre, we're planning to modernise across the board over the course of the next 12 months.

"We will be looking to increase the numbers of weddings with the overhaul. But, also, leisure and corporate are a huge part of business at our existing hotels so we'd be looking to increase that side of it with additional conferences etc.

"The existing bar and restaurant area is also quite small, so we are looking to expand the size of that also. We'll become an attractive location for locals looking for a night out."

While the most recent accounts for Monksland Oyster Hotels Limited showed it made a loss of €392,000 in the year ending 30 June 2016, McDonagh said the group is a "growing part of Athlone and a growing part of Roscommon".

"Athlone is a thriving town, the main town in the Midlands, there's a lot of industry there and in the east Galway area. It has a lot of opportunity in the food and beverage arena."

McDonagh said that he will be speaking to the staff on the ground "in the next week or so" when things are cleared with the CCPC but that his team have already spoken with management. "There's good stable staff there since the hotel opened, and they will obviously be secure following the takeover. There will actually be a number of vacancies in the management side of things so we will have a recruitment drive for that."

He added that they intend to keep the business open throughout the renovation period. "We have bookings for different events to honour and the majority of the works are superficial," he said.

But the bustling hotel business does not distract McDonagh from his first love; Supermac's is continuing to expand nationwide, with the first outlet due to open in Donegal at the beginning of August.

It will be located in Donegal town as part of a plaza which will include a service station and convenience store. The number of these motorway plazas owned by McDonagh, perhaps most notable Moneygall's Obama Plaza, is also continuing to grow.

In January, the Irish fast food chain announced that it was going to create 400 jobs with six new restaurants.

Outlets in Balbriggan, Co Dublin, Naas, Co Kildare, and Ballyvolane in Co Cork have already opened while two others in Cork - Glanmire and Bandon Road - are expected to officially open in the next few weeks.

McDonagh's intention to get the Supermac's brand operating across Europe has been blocked by an ongoing brand battle with McDonald's.

The brand has been attempting to break into the European market since 2014, but was turned down in 2016 by the EU Intellectual Property Office (EUIPO) after an objection by McDonald's.

  • In its latest submission to the EUIPO, the Irish firm claimed that the US giant's opposition reflected fear "given the success of Supermac's in Ireland and the UK, success in Europe would be highly achievable".

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