Dalata Hotel Group PLC (DAL,DHG)
ISE: DHG LSE: DAL
Dublin and London | 29 June 2022: Dalata Hotel Group plc ("Dalata" or "the Group"), the largest hotel operator in Ireland, with a growing presence in the United Kingdom and continental Europe, provides a trading update for the second quarter of 2022.
The faster than anticipated recovery in hotel markets over the last four months has continued to surpass the Group’s expectations. Dalata announced in April that RevPAR[i] for the Group was 9% ahead of 2019 levels for the March/April period. Group RevPARi is expected to be 18% ahead of 2019 levels for the May/June period.
The recovery in Dublin has been particularly strong due to the combination of significant demand and reduced supply in the market. Demand has largely returned across all segments led by very strong leisure demand particularly around event dates and weekends. The reduction in supply is primarily the result of rooms being utilised to accommodate a substantial increase in refugees requiring emergency accommodation due to the war in Ukraine. Dalata’s RevPARi in Dublin for the May/June period is expected to be 18% ahead of the same period in 2019.
Trade is also very strong in the UK and Regional Ireland where Dalata’s RevPARi for the May/June period is expected to be 7% and 27% ahead of 2019 levels respectively.
As previously noted, the Group is also experiencing cost inflation across the business. The Group continues to proactively manage the business to protect margin recovery in response to the ongoing inflationary pressures. Our margins will continue to benefit from the Dalata decentralised model with best-in-class hotel leadership and cost management, dynamic pricing and sustainability initiatives which are reducing energy consumption.
We expect Adjusted EBITDA to be in excess of €81 million for the six months ending 30th June 2022. This reflects a strong first half trading performance despite operations being curtailed by Covid restrictions during the first two months of the year. We note the on-going volatility and uncertainty in the wider macro environment which may impact future performance and the Group will remain agile and innovative in responding to any challenges and opportunities that may emerge. However, we have not seen an impact on demand to date and the outlook for the summer months looks very strong at this point.
Dalata is also pleased to announce the completion of the sale of the Clayton Crown Hotel, London to a company controlled by AG Hotels Group for a cash consideration of approximately £21 million. The Group also expects to conclude the sale of the Merrion Road residential units to Irish Residential Properties REIT plc for €42 million in the coming weeks.
Dermot Crowley, CEO, Dalata said:
“I am very pleased with the manner in which demand has recovered across our markets since Covid restrictions were lifted earlier in the year. Our teams in our hotels and Central Office have responded incredibly well to the swift recovery. Our focus on the development of our people and our strategy of keeping our core teams in place throughout the pandemic is underpinning our ability to fully operate our hotels despite the backdrop of a tight labour market. Our new hotels in Manchester, Bristol, Dusseldorf and Dublin are also trading very well and we look forward with confidence to the opening of the Clayton Hotel Glasgow City and Maldron Hotel Merrion Road in Dublin in the coming months, adding much needed additional supply to the market.
I recognise concerns about rising hotel prices in Ireland. Our average room rate in Dublin for the second quarter of 2022 was €160. This is an increase of 20% over 2019 (on a like-for-like basis). Dublin’s highly competitive market is experiencing a period of exceptional pent-up post-pandemic demand at a time when supply is temporarily reduced as a direct consequence of the war in Ukraine. In June, our Dublin hotels are expected to reach an occupancy of 93%. Despite widespread cost inflation, we continue to honour longstanding agreed prices, including those in place for over 160,000 coach tour guests we are welcoming over this summer.
We will continue to assist the Irish Government in its response to the crisis created by the war in Ukraine by making 5% of our rooms in the Republic of Ireland available to the Department of Children, Equality, Disability, Integration and Youth for the remainder of this year at the rates requested.
We look forward to the balance of the year with confidence whilst being aware of the potential threats caused by the general economic outlook. We are excited by the potential of our recently opened hotels and by those in the pipeline. We have strong teams in place and we will be agile and innovative in responding to any challenges that may emerge”.
Dalata Hotel Group plc was founded in August 2007 and listed as a plc in March 2014. Dalata is Ireland’s largest hotel operator, with a growing presence in the UK and continental Europe. The Group's portfolio comprises 48 predominately four-star hotels with 10,511 rooms and a pipeline of over 1,500 rooms. The Group currently has 28 owned hotels, 17 leased hotels and three management contracts. Dalata successfully operate Ireland’s two largest hotel brands, the Clayton and the Maldron Hotels. For the year ended 31 December 2021, Dalata reported revenue of €192.0 million and a loss after tax of €6.3 million. Dalata is listed on the Main Market of Euronext Dublin (DHG) and the London Stock Exchange (DAL). For further information visit: www.dalatahotelgroup.com
[i] RevPAR is stated on a like for like basis. Like for Like hotels include a full period performance of hotels, regardless of when acquired and excludes new hotels in their first year of trading and the Ballsbridge Hotel as the lease matured on 31 December 2021.
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