Hotels Fully Open as Leisure Trade Picks Up
ISE: DHG LSE: DAL
First hotel in Glasgow to open in August
Dalata Hotel Group plc (“Dalata” or the “Group”), the largest hotel operator in Ireland with a growing presence in the United Kingdom, provides a trading update for the second quarter of 2021 in light of the on-going impact from Covid-19.
Trade at the Group’s hotels improved in the second quarter as non-essential customers were allowed to return to hotels on 17 May (England & Wales), 24 May (Northern Ireland) and 2 June (Republic of Ireland). Occupancies for the second quarter were 24% in Dublin, 32% in Regional Ireland and 30% in the UK.
The Group is mitigating the impact of reduced trading levels through pro-active cost control and the utilisation of available Government supports. As a result, the Group expects to be close to break-even at Adjusted EBITDA for the first six months of 2021.
Prior to re-opening, the Group repeated the audit of its health and safety practises at all hotels with independent accreditation from Bureau Veritas to provide further comfort to our people, our guests and our suppliers.
Throughout the pandemic, we kept our core management teams in place and maintained strong engagement with our people. The retention of our core teams ensured a smooth re-opening of the hotels for non-essential customers.
Since re-opening, trading has been better than expected and while the lead time on bookings remains short, the Group’s forward bookings continue to improve. Occupancies for June were 37% in Dublin, 60% in Regional Ireland and 44% in the UK. As seen in July and August 2020 when restrictions were relaxed, there has been a bounce in leisure demand at our hotels in Regional Ireland and Regional UK driven by staycations during the summer months. Demand for our Dublin and London hotels in the summer months is expected to be ahead of the level achieved in 2020 but will remain significantly below 2019 levels. Both cities require the return of international travel for occupancies to recover more substantially.
The Group continues to protect its liquidity with current cash and undrawn debt facilities of €267 million. Cash flow management, improved trading and continued government supports limited the cash outflow to €27 million since the end of December.
Dermot Crowley, CEO Designate said: “I am delighted that our hotels have fully re-opened to the general public. Our strategy of retaining our core teams throughout the pandemic has proved to be very beneficial. We have experienced teams in place who have serviced essential business during lockdown and have recently managed the re-opening of our hotels to all guests in a very safe manner. Despite the continuing impact of the Covid-19 pandemic, we continue to focus on protecting what is critical to Dalata’s long-term success. Our people are enthusiastic and engaged, our balance sheet and financial position remain robust, we have maintained communications with our customers, and we have strong partnerships with the institutional landlords who are fundamental to our growth strategy. Covid-19 continues to have a very significant impact on the hospitality industry. I remain encouraged by the pace of the vaccine rollout in both the UK and Ireland but am also aware of the threats posed by the uncertainty surrounding the potential impact of the Delta variant. In Ireland, international travel for non-essential reasons is currently expected to resume from 19 July. I look forward to welcoming international guests back to our hotels in the not-too-distant future. We look forward to opening our first hotel in Glasgow next month. This 300-room Maldron hotel is superbly located in the centre of Glasgow. We are on course to open a further six hotels in Bristol, Manchester, Glasgow and Dublin between November this year and May next year. Unfortunately, our previously announced Maldron Hotel in Birmingham will not now be proceeding as the developer has encountered difficulties in relation to the site. We still have an exciting pipeline of close to 3,000 rooms to open over the next three years. We will work on expanding this pipeline further in the coming months. I am confident that with our proven track record, well-invested portfolio, strong balance sheet and team of talented people, we will continue to drive long-term success for all of our stakeholders. I am excited about the future for Dalata as we emerge from Covid-19.”