PAT McCANN of Maldron Hotels has taken over the management of White’s hotel in Wexford following the appointment of a receiver to the business last week.
The arrangement will allow White’s to remain open as Mr McCann’s team provides a “complete solution” for operating it.
Kieran Wallace of KPMG was appointed as receiver to White’s a week ago upon the request of Ulster Bank, which was owed money by the hotel.
Receivership can lead to the closure of a business but in some cases, as in the situation with White’s, a firm will continue to trade with a view to increasing its value.
Under the deal with Mr McCann, White’s will retain its name and will be operated independently of Maldron Hotels, which Mr McCann partly owns.
He yesterday described White’s as “a super facility” and said he did not plan to implement “dramatic changes”. He added that the hotel had been well-run but would now be managed “on a larger scale”, allowing for more efficient procurement and distribution.
The 157-room hotel is trading well, but its debts outweigh its profits. “It is profitable but not enough,” said Mr McCann.
There is no threat to the hotel’s 170 staff and all reservations will be honoured, he said.
The well-known Wexford town hotel undertook a €42 million redevelopment between 2004 and 2006, with the project involving a €9.6 million investment by a group of 20 wealthy individuals assembled by stockbroking firm, Davy.
The investors, who included Glen Dimplex chairman Martin Naughton, were entitled to offset the entire €42 million investment against their personal tax bills for seven years after the redevelopment. This depended, however, on the hotel remaining open.
Mr McCann said the hotel business in general is under serious pressure, with no improvement likely until 2011. “Business in the hotel sector is struggling. This will be a very tough year, as will 2010.”
His firm now manages six hotels under a contract arrangement, which sees it receive a share of a hotel’s profits and revenues. The other hotels include the Belvedere on Dublin’s Parnell Square and the Clayton Hotel in Galway.
Maldron, meanwhile, has 10 Irish hotels in its portfolio, which is run separately. The Maldron group came into existence after Mr McCann and a consortium bought out the Quality and Choice hotel chains in 2007.
Mr McCann said plans to expand the Maldron brand into Britain had been shelved until funding becomes available.
