The decision to redevelop Dublin's Clarence Hotel is not surprising in light of the poor financial performance of the property over recent years.
While U2 are rated by Forbes magazine as the fourth most influential entertainers in the world, their star power has failed to enhance the financial performance of the hotel.
Although in mitigation, the small number of rooms at the hotel is a particular obstacle to commercial success. The most recent accounts for the Clarence's holding company, Brushfield Limited, show that for the year ended December 2005, the hotel made a pretax loss of €611,271. Its profit and loss account shows accumulated losses over the years of €12.3 million.
The accounts show that the rooms at the Clarence generated revenues of €2.8 million in 2005, with food sales coming to €1.5 million.
These are small figures by the standards of the hotel industry, with the lack of rooms clearly hurting the bottom line.
While the hotel has been able to pull in revenues each year of about €6 million or more, this has been eaten up in costs and interest repayments.
Against this background it was somewhat surprising that last year two property developers - Derek Quinlan and Paddy McKillen - decided to take a shareholding in the hotel. They clearly see potential in the site. However, another director of the hotel, Harry Crosbie, decided to retire as a director.
While the financial performance has been poor, the hotel boasts an impressive guest list like former president Bill Clinton who has stayed several times and in the last set of accounts - signed off by Bono (Paul Hewson) and the Edge (Dave Evans) - the directors were not discouraged by the losses.
"The directors are satisfied with the results for the year and the state of affairs at year end date. The company is confident of achieving good sales growth and results in 2006," the accounts state. These latest accounts have yet to be lodged with the Companies Office.
Bono and the Edge talk in the accounts of their determination to see the company raising profitability through "cost efficiencies and continuous improvement".
The owners of the hotel certainly cannot complain of a lack of exposure, at home or abroad. The band's stake in the hotel is well known and this association is at the heart of its marketing. While the closure of the Kitchen nightclub in 2002 denied the hotel its place in the social columns, the bigger problem has been a lack of sales.
Back in 2001, a year before the Kitchen closed, the hotel was boasting sales of €7.8 million. But this has now fallen to just over €6 million.