“Innovation is a state of mind”
Dermot Crowley, CEO of Dalata Hotel Group, tells H&R Times how a people-first approach motivates the group’s progressive policies.
When Dermot Crowley is not dealing with day-to-day business at Dalata, Ireland’s largest hotel operator, he helps coach the U14 hurling teams at Kilmacud Crokes in Dublin. When he gives pep talks to the kids at the start of matches, he doesn’t just tell them to go out and win. Instead, he gives them “advice on how they should play the game, the processes and tactics that give them as an individual the best chance to succeed and as a team”
Dalata’s CEO approaches the hotel business with a similar mindset. “You shouldn’t go into a hotel and say, ‘I want my revenue to be this. I want my profit to be that’. Obviously, we have targets. But first of all, you have to take care of your people, customers, suppliers, all of your stakeholders.”
As a PLC, Dalata is focused on its bottom line. In Crowley’s reckoning, however, the bottom line takes care of itself – as long as the company takes care of its employees, customers and other stakeholders. Small things matter. For example, in the final quarter of last year, the CEO asked his hotel GM’s to review their back-of-house facilities – from staff canteens to changing rooms – and assess how these might be improved. The group is increasing its financial allocation for staff meals – encouraging its chefs to make staff food every bit as important as front-of-house food – and redeveloping its employer brand in order to sell the benefits of working for Dalata.
“In the same way we fight for our customers, we have to fight for the people who work for us,” Crowley explains to H&R Times. “Whether they are people looking for long term careers in the industry, or someone who wants to work with us for three of four years.”
Crowley was promoted from Deputy CEO to chief executive of Dalata following the retirement of Pat McCann last year. Outside the corporate brand of Dalata, the group operates two central consumer brands: Clayton and Maldron.
In the first half of 2022, Dalata opened four new hotels, including two in Dublin: the Samuel Hotel on North Wall Quay and a Maldron at the site of the former Tara Towers. Imminent openings include a landmark property in Shoreditch, London, and new hotels in Liverpool, Brighton, and Croke Park in Dublin.
“By the time we finish our pipeline, between this year and next year, we’ll have added another 3,000 rooms, bringing it up to 12,000 across Ireland, the UK and Germany,” says Crowley.
The group recently entered the continental European market with the purchase of Hotel Nikko in Dusseldorf, Germany. The group wanted to dip its toe into the European market with a single property, rather than buy a multitude of hotels at once.
“We didn’t want to be in a situation where we took over five or six hotels in Europe. Instead, we’re taking over hotels one by one, at the start, so we get to understand what it’s like operating a hotel in Germany. When I met the team in Dusseldorf, just after we took over the hotel, I said, ‘We’re here to learn from you. We’re a small Irish company. We’re not coming in here thinking that we can show you how to run a hotel. We can learn and we are learning.’”
What has he learned so far about the European way of doing business? “Germany was slower coming out of pandemic restrictions. There’s a far higher fixed cost of labour and less flexibility. People tend to come through hospitality colleges. If you’re met at reception at a German hotel, there’s a good chance that person has an education in hospitality.”
Dalata brings a sprinkle of its own magic to its European partners. Garret Marrinan, former GM at The Gibson Hotel in Dublin, another Dalata property, is overseeing the company’s expansion in Europe in his role as Integration Manager. Upon purchase of Hotel Nikko, Dalata invested in its back-of-house areas and is now highlighting Dalata Academy, its in-house training platform, which it plans to translate into German, for staff. Employee satisfaction and retention is central to the hotel group’s decision-making process.
Dermot Crowley is a perfect fit for Dalata’s progressive strategies. After growing up in Bishopstown, in Cork, he went to UCC where he took a commerce degree, which juggled finance, marketing and management. In 1993, the same year he married, he qualified as a chartered accountant. Crowley’s career began in earnest when he travelled to London to work as a financial analyst for Procter and Gamble (P&G), where his duties included overseeing Max Factor’s female make-up brands. While in London, a friend working for Forte told him that The Shelbourne in Dublin was scouting for a financial controller.
“My wife Jo-Ann was working for KPMG at the time. She had an opportunity to transfer back to Dublin, so I ended up as financial controller in the Shelbourne and stayed there for three years. I got the bug for hotels and ended up, toward the end of my tenure there, doing duty management shifts. I got to understand how hotels work. The fact you’re dealing with consumer, there’s so much happening on any given day, so much potential drama…”
Following his stint in the Shelbourne, he went to join Glencullen, Bill Cullen’s company, which operated the Renault franchise in Ireland. Crowley’s father had a business that supplied car body repair shops with paint and car body material. When his dad retired, his brother took it over. So the nature of Glencullen’s business was not unfamiliar to him, but he missed the hotel industry. So when Pat McCann, then chief executive of Jurys Doyle, asked him to head the development team at Jurys, he jumped at the opportunity.
Over six years, Crowley helped open hotels in Ireland, Britain, and the US. His bigger deals included the sale of the company’s property in Ballsbridge to Sean Dunne for €260 million, in 2005. For the following six years, he worked at private equity house Ion Equity. In 2012 he joined Dalata, which reunited him with McCann who founded the company in 2007.
The advantage of his experience, working in different industries, Crowley believes, is “they all have their own unique characteristics. They all have their challenges and attractions. One of the major attractions of the hotel industry is it is a people-orientated industry. Early on, I learned that if you don’t have good people you’re on the back foot straight away.”
Crowley brought a breadth of knowledge to Dalata’s various business off-shoots. Beyond Clayton and Maldron, the group owns a number of smaller brands, such as The Gibson Hotel in Dublin. Upon taking over this hotel in 2016, Dalata initially planned to make it a Clayton: “The staff told us that Gibson is a strong brand. It has a strong support and individual feel so we left that as the Gibson.”
They applied the same theory to the Samuel Hotel, a mixed use development that felt like a brand in its own right. Dalata also operates its coffee brand Red Bean Roastery in all its hotels; Club Vitae Health Club, its health suite brand, and Grain & Grill, Maldron-branded restaurants.
Dalata runs a decentralised model. Central office sets a strategy and provides support but each hotel’s team – revenue manager, general manager, financial controller, HR and sales – are in control of their own destinies and set their own rates.
“We absolutely believe in empowering people,” remarks Crowley. “People like to be empowered! We want to take away the fear of making mistakes. I make mistakes every day, within reason. I’m trying to introduce a sense of innovation – encouraging people how we can do things differently. Innovation is a state of mind. If we’re honest, change frightens us all. As you get older, you’re naturally less tolerant of change, so you need to continuously challenge yourself.”
In 2022, as we ease out of the pandemic, there is a shortage of workers within the industry. Dalata prioritises staff recruitment and retention. The CEO wants to promote the advantages of working for the company, particularly to transient workers – whether students, or people desiring a secondary income. In late 2021, for example, Clayton Hotel Liffey Valley was looking for housekeepers and ran an advertising campaign titled Mammies and Daddies, We Need You.
“They were looking for parents who wanted additional income. They could work shifts from 9am to 1pm, five days a week. They could drop their kids off to school, work for four hours, then leave and collect their kids. As an industry, we need to sell the advantages better.”
The CEO believes the industry must harness the potential of small rural communities where hotels “can provide a positive force”. When jobseekers consider businesses such as Google or Facebook, they often think of pristine work environments and good wages. Tourism – a sector that arguably offers more fulfilment than big tech – should package itself in the same way. It should be considered an exciting place to work, he contends.
Beyond transient workers, Dalata promotes from within. Eight of the 10 senior managers in Dalata’s latest Dublin property are internal Dalata appointees. Typically, 70% or 80% of appointees are internal. “We’re very focused on people who want to develop a career within the industry, as well as those who just want to come in and work for a while,” says the CEO.
The Dalata Academy offers a range of development programmes, encouraging people – whether in hotel operations, human resources, finance, sales, or revenue management – to progress through the organisation. A number of these development courses are credited with Galway-Mayo Institute of Technology, so graduates emerge with a diploma from GMIT.
The Dalata CEO is aware of the challenges facing the industry. Gas and electricity has rocketed in price. We are starting to see significant food inflation, which will likely increase in the latter half of the year due to the impact of the war in Ukraine, and there is a shortage of labour and people. Insurance and local taxes are also scraping the ceiling. Dalata is now prioritising its sustainability initiatives: setting itself measurable targets and reporting against those targets. By 2026, the group aims to reduce its gas and electricity, per room let, by 20%, food waste by 15% per sleeper, and water consumption by 15% per sleeper.
“By the end of 2023, we want our top tier suppliers to provide us with information on their carbon usage, so we can understand our own emissions,” says Crowley. “We’re looking at a science-based target as well, and we hope to commit to one of those within the next 12 months.” The company, in its annual report has made a commitment to Environment Social and Governance (ESG) standards, which is used by investors to screen potential investments.
None of this a box-ticking exercise, he insists. Instead, it’s a pathway toward competitive advantage. Large U.S. multinationals, such as Apple, Google, Facebook and Intel – many of whom are Dalata’s customers – are far beyond other businesses in sustainability efforts. Why can’t a hotel group do the same, ponders Crowley. “When we build new hotels now, we’re exploring how we can make them more carbon efficient.”
The CEO is firmly optimistic about the future. “There are always clouds on the horizon,” he says. “Any challenges we have now are nothing compared to what we faced two years ago when the entire industry was shut down and we had no idea what the future held for us.”
Win, lose or draw, Dalata’s CEO vows to continue giving his hotel group, and the people who work for the group, nothing short of one hundred per cent.