Ireland's largest hotel operator, Dalata, has described trading as "robust" in its financial update for the second half of the year.
The group said it is expecting to see 4% growth year-on-year and deliver adjusted EBITDA in excess of €232m.
Revenue per available room (RevPAR) is expected to be c. 3.5% ahead of last year for November/December, with strong performances in Dublin and the UK. For the full year, group RevPAR is on track to be 1% ahead of 2023.
The group estimates that the recently announced changes in UK National Insurance, the increased minimum wage in Ireland and the increased living wage rates in the UK will increase hotel payroll by c. 5% in 2025 on a like-for-like basis.
However, the benefit of a €2m reduction in contracted energy pricing, the ongoing roll out of further efficiency and innovation initiatives and through RevPAR growth in the group's markets is expected to mitigate the impact of a rising wage bill.
Dalata said that next year it will also benefit from the full-year impact of hotels opened by the group in 2024 and the acquisition of Radisson Blu Hotel Dublin Airport, which is still subject to Competition and Consumer Protection Commission approval.
Dermot Crowley, CEO of Dalata said: “We are on track to deliver another strong financial performance, headlined by another year of growth in both our revenue and Adjusted EBITDA performance.
"Our focus on innovation over the last three years continues to deliver enhanced productivity and mitigate the impact of cost inflation on our margins. It is always challenging when external input costs are rising; however, I am delighted with how everyone at Dalata has responded to the challenge."
In addition to the Radisson Blu Hotel Dublin Airport acquisition, Dalata has also agreed to a lease for Clayton hotel to be developed in City of London and secured €600m in new debt financing.
"This positions us strongly to capitalise on any opportunities that will deliver accretive value to the business and further strengthen our financial performance," said Crowley.
"We will continue to balance disciplined growth, capital efficiency and financial strength with returns to shareholders reflected by our dividend payments and two share buy-back programmes."
Crowley said that he was pleased that a proposed cap of 25.2m passengers at Dublin Airport will not apply from next March to October following a High Court ruling.
"The ability of Dublin Airport to continue to increase passenger numbers is crucial to support further growth across the Irish economy, particularly in the hospitality and tourism sectors which are key sources of employment for the island of Ireland," he said.
"Looking forward, I am pleased that the cap will not apply in the summer of 2025, and we are hopeful that it will be removed fully in time."
"It is expected that passenger numbers at Dublin Airport will grow by 4% in 2025, with increased access from North America, which will be very positive for hotels across the whole of Ireland."
Photo: Dermot Crowley. (Pic: Supplied)
