THE NATIONAL Asset Management Agency (Nama) has not subsidised any loss-making hotels and does not intend to do so, Minister for Tourism Mary Hanafin said.
As concerns have been raised about the impact of Nama on the hotel industry, Ms Hanafin told the Dáil the agency had already met the Irish Hotels Federation to “allay concerns that it may be acting in an unco-operative manner or as a monopoly hotel player”.
So far the assets agency has completed the transfer of 35 Irish-based hotels, and the Minister was “struck by the fact that fewer hotels” than expected would be transferred. “It now appears that it will only control between 60 and 70 hotels,” she said.
The Minister assured the House that Nama “will not depress the market by selling them off immediately, and it is anxious to take advice on the public policy issue of the range and categories of hotels needed”.
She added that it “has begun its engagement with borrowers in relation to business plans on a case by case basis”.
Ms Hanafin met Nama’s chairman, chief executive and senior officials this week and she expressed the hotels federation’s concerns “that the apparent actions of some banks in sustaining non-viable hotels could have the effect of squeezing out some well-established, family-run operations”. Nama had advised her it had not subsidised loss-making hotels “nor does it intend to”.
The Minister stressed that the meeting was “at an overall policy level, and not related to any specific enterprise or borrower”.
Fine Gael tourism spokesman Jimmy Deenihan asked if the Minister discussed the availability of bank credit following Bank of Scotland’s withdrawal. The hotel sector “is heavily over-borrowed and is experiencing difficulties in accessing working capital”.
Ms Hanafin said Nama does not have the “same relationship” with Bank of Scotland and Ulster Bank that it does with AIB and Bank of Ireland but “these banks are also obliged to lend in a prudent and sustainable manner”. She would be happy to engage with the Irish Banking Federation on the issue.
Mr Deenihan highlighted concerns about the distressed state of the hotel sector and the potential for 180 hotels and guesthouses to go into liquidation because of “excessive local authority charges”. He noted the criticism by the hotels federation of “inaction” by Minister for the Environment John Gormley on the issue.
Mr Deenihan said those premises could go out of business “because of the refusal of county managers, under the Minister’s direction, to negotiate”.
Ms Hanafin said she had “impressed upon” Mr Gormley the “penal nature” of commercial rates for the hotel industry.
