Dalata says hotel recovery continues to beat expectations
Dalata Hotel Group said today that the faster than anticipated recovery in hotel markets over the last four months has continued to surpass its expectations.
In a trading update for the second quarter of 2022, Dalata said that group Revenue Per Available Room (RevPAR) is expected to be 18% ahead of 2019 levels for the months of May and June.
The owner of the Maldron and Clayton hotel chains noted that the recovery in Dublin has been particularly strong due to the combination of significant demand and reduced supply in the market.
It added that demand has largely returned across all segments led by very strong leisure demand particularly around event dates and weekends.
“The reduction in supply is primarily the result of rooms being utilised to accommodate a substantial increase in refugees requiring emergency accommodation due to the war in Ukraine,” it stated.
It also said that trade is very strong in the UK and Regional Ireland where its RevPAR for the May/June period is expected to be 7% and 27% ahead of 2019 levels respectively.
Dalata also said it was experiencing cost inflation across the business and said it continues to proactively manage the business to protect margin recovery in response to the ongoing inflationary pressures.
The hotel group said it expects adjusted EBITDA to come in at over €81m for the six months ending June.
It said this reflects a strong first half trading performance despite operations being curtailed by Covid restrictions during the first two months of the year.
“We note the on-going volatility and uncertainty in the wider macro environment which may impact future performance and the Group will remain agile and innovative in responding to any challenges and opportunities that may emerge,” it said.
“However, we have not seen an impact on demand to date and the outlook for the summer months looks very strong at this point,” it added.
Noting the rising hotel prices, Dermot Crowley, CEO of Dalata, said the group’s average room rate in Dublin for the second quarter of 2022 was €160, an increase of 20% over 2019 on a like-for-like basis.
“Dublin’s highly competitive market is experiencing a period of exceptional pent-up post-pandemic demand at a time when supply is temporarily reduced as a direct consequence of the war in Ukraine,” Mr Crowley said.
“In June, our Dublin hotels are expected to reach an occupancy of 93%. Despite widespread cost inflation, we continue to honour longstanding agreed prices, including those in place for over 160,000 coach tour guests we are welcoming over this summer,” he added.
Mr Crowley also said the hotel group will continue to assist the Government in its response to the crisis created by the war in Ukraine by making 5% of its rooms in the Republic of Ireland available to the Department of Children, Equality, Disability, Integration and Youth for the remainder of this year at the rates requested.
Dalata also today said it had completed the sale of the Clayton Crown Hotel London to a company controlled by AG Hotels Group for about £21m.
The group also expects to conclude the sale of the Merrion Road residential units to Irish Residential Properties REIT for €42m in the coming weeks.