It took just eight minutes for Irish hotel group Dalata to secure the necessary approval from shareholders yesterday for its next phase of empire building.
The sparsely attended extraordinary general meeting in the Clayton (formerly Bewleys) hotel in Ballsbridge gave the company the green light to raise €160 million in gross proceeds from the issue of 42.7 million new shares.
The money will be used to acquire freehold assets, to build new properties in Dublin and to refurbish and extend some of the hotels in its existing portfolio.
Dalata chief executive Pat McCann has his sights set on a number of Irish properties likely to come to market in the next six months or so, including the Gresham Hotel, a grand old dame of the Dublin hotel scene. He’s also planning to spend about €30 million adding close to 300 rooms to properties in Ballsbridge, Dublin Airport, Belfast and Galway.
And McCann has his eye on six or seven sites in Dublin that he thinks might be suitable for new-build hotels, of the three- or four-star variety, although he accepts it would be lucky to get two of them across the line given increased competition from developers as the economic recovery continues apace.
There’s no doubt new hotels are needed in Dublin, as tourism and corporate business steadily increases. The five-star Marker in the docklands and the Dean on Harcourt are among the few to have opened since the crash in 2008.
It’s a different story outside Dublin, where hotels in many towns and cities continue to struggle, save for obvious exceptions such as Galway and Killarney. Hence McCann’s hope that the Government retains the industry’s special 9 per cent VAT rate in next week’s budget. With a general election just around the corner, this wish should be granted.
The big risk for Dalata going forward is surely execution. It spent €524 million acquiring 14 properties in the first half of this year, including nine Moran hotels, along with launching a new brand (Clayton). It is now proposing expansion on three additional fronts.
Dalata has had a remarkable run since becoming a public company in March last year and McCann will have to draw on all his experience in the hotel trade for this upward trajectory to continue unchecked.