The largest hotel operator in Ireland, Dalata Hotel Group, which is fast-growing in the UK, has reported a 68% reduction in revenue leading to loss after tax of €101m.
The firm also announced that CEO Pat McCann (pictured left) intends to retire over the next 12 months, with Dermot Crowley (right), the current Deputy Chief Executive, to take over after a transition period.
The company's proactive cost reductions and government support schemes protected employment and cash during periods of low occupancies. The firm also amended its debt facility in July with additional €39m facility, and equity placing in September raised net proceeds of €92m to further enhance balance sheet.
During the period, the group sold and leasebacked Clayton Hotel Charlemont, Dublin in April for €65m.
Looking at reopening, Dalata said that management teams at hotels and central office are in place to manage the recovery. The hotels are primarily located in large cities or at major airports, and are modern and well-maintained.
The company also revealed it has close to 3,300 rooms in the pipeline situated in strong locations. It currently operates over 41 hotels under Maldron Hotel and Clayton Hotel brands throughout Ireland & the UK, as well as managing a portfolio of Partner Hotels.
A healthy development pipeline principally in the UK will bring the hotel count to 54.
McCann commented, '2020 has been an extraordinary year, unlike any other I have encountered during my 50-year career in the hospitality industry. The impact of the Covid-19 pandemic has been extremely challenging for our industry, our people and our communities.
'When I reflect on our performance in 2020, I am extremely proud of what we accomplished together. We have ended a very difficult year in a strong financial position with our core teams intact, morale running high and we are ready for the challenges and opportunities ahead. Quite simply, we are unbowed and unbroken.
'We achieved this by holding firm to the values and beliefs that define us including being fair, transparent, consistent and balanced.'
McCann continued, 'Our financial position remains robust. We have always managed the business with a strong understanding and awareness of the inevitable ups and downs facing our industry, including shocks, and yet position it for ongoing growth and opportunity. We therefore entered the crisis in a very strong financial position. Our strategy of maintaining an asset backed balance sheet and comfortable gearing ensured Dalata was well placed to confront the challenges which followed.
'Through our proactive response to the pandemic and the tremendous efforts and collaboration by our people and our key stakeholders, we protected our financial position. I would like to take this opportunity to thank all of our people and our stakeholders for their invaluable hard work and support over the last 12 months.'
McCann went on, 'We have very strong relationships with our banking partners. The amended debt facility agreed in July 2020 with a temporary revised suite of covenants will provide flexibility and support as business recovers.
'Our institutional landlords also continue to actively support Dalata and remain committed to our long-term partnerships. Our shareholders strongly supported us through the equity placing which raised net proceeds of €92 million in September. These strong relationships with our stakeholders will be fundamental as we move through the recovery and continue to create long term value into the future.
'In addition to our strong financial position, I am very pleased that we have retained our key people. We made a decision early in the pandemic to keep the core management teams in place at our hotels and central office.
'This approach, together with our decentralised operating model, was absolutely critical to our success during 2020 as it enabled us to react quickly as the level of restrictions in Ireland and the UK changed. It will also be beneficial that our regular guests are greeted by familiar faces when they return.'
McCann expanded, 'When I talk to our teams at the hotels, I am heartened by their optimism in spite of what has been a very challenging year for them. Like myself, our people enjoy the buzz of a busy hotel and are eagerly looking forward to welcoming guests back to our hotels in the year ahead.
'We maintained engagement with our people including those we could not bring into work through our employee app and offering learning and development courses through our newly branded Dalata Academy.
'Over 92,000 courses were completed during 2020. I am proud to see the strong motivation of our people to continue upskilling and developing. They are the heart and soul of our business and I am delighted that they too are unbowed and looking to the future.'
McCann added, 'We are thankful for the support provided by the Irish and UK governments over the last 12 months. Given the scale of our business in Ireland, the Irish support packages are particularly important.
'The Employment Wage Subsidy Scheme and the commercial rates waiver in Ireland remain in place until 30 June 2021. The on-going support is critical as the industry navigates through this crisis and positions for recovery.
'The 'Experience Economy', which includes the hospitality sector, employs over 330,0002 people in Ireland and is particularly important to the regional economy. I am now calling on the Irish government to continue their commitment to support this vital part of our economy as it starts to recover.
'One of the key supports after the financial crisis was the reduction in the VAT rate. I am asking the Irish government to commit to a minimum of five years to a VAT rate of 9%. The big beneficiary of this will be to the exchequer itself and it will support getting people back to work.
'We continue to make good progress on our growth strategy with a pipeline of close to 3,300 rooms. We are excited about other opportunities we are currently looking at. While we remain focused on delivering our growth strategy in our top target cities in Regional UK, we are also seeing opportunities in London.'
McCann noted, 'The outlook for the near-term remains uncertain at present. The roll out of vaccines both here in Ireland and abroad continues and I remain positive on the medium-term prospects for the Group.
'I believe that Dalata's key strengths will differentiate us as business recovers. Our core teams of excellent hotel operators are ready and excited to welcome customers back to our hotels when they re-open.
'The Group's robust financial position with an asset backed balance sheet, strong liquidity and comfortable gearing ensures Dalata is well placed as we head into 2021. Finally, our experienced management team and our record of identifying and securing opportunities in a crisis will help us position the business for a successful recovery and to look for growth opportunities that may arise out of the crisis.'
McCann finished, 'We are all ready for the challenges and opportunities that 2021 may bring and look forward to the year ahead with energy and enthusiasm. Dalata is unbowed and unbroken.'