Sean Quinn's Prague Hilton is undergoing a €50 million makeover that the hotel says should increase its profits by at least €1.5 million per year.
The upgrade is aimed at increasing the facility's conference-hosting capacity by almost 50 per cent, while also improving the overall hotel.
The heart of the expansion project is a 1,200-metre conference hall. Plans also include the construction of a sky-bar and refurbishing every room, as well as public areas and outdoor landscaping. The main restaurant has also been renovated.
For a hotel that posted total revenues of 1.3 billion Czech koruna (€45.5 million) in 2005, it is a very substantial investment.
Armin Zerunyan, general manager of the Prague Hilton, said that he could not explain how the project was being financed, but he indicated that all the details have not been worked out.
"The financing is done mainly by the owners, by Quinn," Mr Zerunyan said during an interview on Friday. "How they finance it I don't know. I'm not employed directly in that respect."
He added, however: "There are schemes where we would also participate partially in the investment, to a certain extent. But these are rather contractual issues."
The management agreement with Quinn Group means that Hilton runs the hotel, and gets a share of the revenues, while the Irish firm owns the site.
Quinn Group entered into the deal with the Prague Hilton in 2004, picking up a 20-year contract that is due to expire in 2015 - with an option to extend the agreement. Mr Zerunyan refused to reveal the value of the deal, but the 2004 purchase of the property was cited as the largest recorded single asset transaction in Czech Republic history.
Quinn Group paid €145 million for the Hilton and a linked hotel, the Ibis Karlin.
With 788 rooms, the Prague Hilton is the largest five-star hotel in the the Czech Republic. But its convention facilities lag behind its overall capacity.
"We are leaving money on the table," Mr Zerunyan said. Conventions bring in exponentially more money per person, he added.
"People are much more careful when they're travelling out of pocket," Mr Zerunyan said. "When they're on their own they're in a saving mode. They want to get the best price. The leisure traveller might eat dinner in a McDonalds, whereas [conference delegates] might have a luxury dinner in the conference centre."
Conferences also bring with them higher room rates because organisers will pay premium rates to ensure quality.
Mr Zerunyan downplayed the cost of the investment, saying it will be recovered in due course. "The difference (in spending) is at least 150 per cent," he said, comparing conventioneers to leisure travellers.
Construction has not yet begun on the new conference hall, which will be cantilevered out towards the river that slices through the capital. When the new hall is completed in 2008 it will have a capacity of 1,400 delegates, which will raise the hotel's overall conference capacity to 4,400.
Mr Quinn's Prague hotel assets form part of his group's hospitality division, which embraces a portfolio of hotels in the Republic and the UK. It also includes the Hilton in the Bulgarian capital, Sofia and well-known golf hotel, the Belfry in England.
Earlier this month, Mr Quinn was named in Forbes magazine as one of the 300 richest people in the world. The magazine estimated the Fermanagh man's net fortune at $2.5 billion (€2 billion). This compared to $1.4 billion for Sir Anthony O'Reilly.
