Tuesday, October 27, 2020
UK

Dalata plans major expansion in the UK

The Irish hotel property giant, Dalata, plans large-scale expansion across major and regional UK cities

In its bid to seize what it sees as a big opportunity emanating out of brexit, Ireland’s biggest hotel operator, Dalata plans to enter the UK in a big way. It intends to fill the void in the hotel industry in the country as big international players move out of regional locations. The move by the hotel group will make it the largest property operator in the three-star and four-star hotel category across the cities it plans to move into.

During the course of the expansion, it will open hotels across 20 UK cities and sees significant expansion opportunities in the cities of Edinburgh, Oxford, Liverpool, Cambridge, York, Bristol, Bournemouth and Southampton.

This expansion by the Irish hotel industry leader will reflect in 8,000 rooms being created across major UK cities. With eight hotels across the country already under its belt, it now aims to raise the number of rooms to 8,000 from a total of 1,700 rooms which it operates at present. The group aims to implement the plan over the next five to seven years, it told investors. These existing properties belong to the three-star and four-star category and cover the cities of London Manchester, Leeds, Belfast, Cardiff and Birmingham.

The Irish hotel property leader sees the UK regional hotel sector as very fragmented and intends to capture 10 per cent to 15 per cent of market in each of the 20 cities that it intends to expand to. The group told investors that it believes, with brexit, there will be a structural shift in the hotel industry and intends to take advantage of it.

Dalata has planned to lease a new Clayton Hotel in Glasgow – a four star hotel comprising 300 rooms which is expected to open at the end of 2020 – which will be built by Artisan Real Estate investors. Currently, the project is awaiting planning permission. It has also planned to lease a new Maldron Hotel, a four-star hotel with 226 bedrooms slated to open next year, being built in Newcastle by a unit of McAleer & Rushe. It has secured a 35-year agreement for the purpose.

The deputy chief executive of Dalata, Dermot Crowley, told investors that the company plans a total of 2,500 rooms in the UK by 2020. He said that all the hotels in the UK are performing well and revenue per available room during the first half of the year was up about 14.6pc. Dermot said that there is a strong increase in the group’s earnings before interest, tax, depreciation and rent costs margin, from 35.6pc to 38pc year-on-year.

The group said that only budget brands have a significant market share. It said that the three and four-star market in certain large regional cities is very fragmented and there are no dominant brands in this market segment.

It added that more than 70pc of regional hotel owner-operators have four hotels or fewer in their portfolios, while operators each with a market share of less than 4pc, comprise 70pc of the regional three- and four-star market in the UK.

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