An ethical approach
Sean O’Driscoll, CEO of iNUA hotel group and co-founder of Cliste Hospitality, on navigating the challenges faced by hospitality businesses in 2023, the challenges of high prices and reduced bed stock in Dublin, and prioritising employees.
Sean O’Driscoll is conscious of the needs of hospitality businesses in Ireland. And something the industry does not need at present, he believes, is a 4.5% hike in VAT. The executive director of iNua and co-owner of Cliste Hospitality, describes his response to the government’s recent decision to retain the 9% rate with a single word: relief.
“I think the VAT rate going up would have been the final nail in the coffin,” O’Driscoll tells Hotel & Restaurant Times. “I’m relieved the government decided to leave the lower VAT in place until the end of August 2023 because I’ve seen the profit and loss accounts of 40-seater restaurants and I know they’re underwater.”
Amidst a cost of business crisis, iNUA Hospitality PLC has felt the pinch. The company owns eight hotels: four Radisson Hotels in Cork, Limerick, Athlone and Sligo; Muckross Park Hotel in Killarney (where O’Driscoll served as GM for six years); the Kilkenny Hibernian Hotel, the Tullamore Court Hotel, and the Hillgrove Hotel in Monaghan. In 2022, the group’s energy bills equated to €10.10 extra for every room they sold, compared to 2019.
But iNUA has weathered the storm. Its group status afforded it the ability to conduct deals with suppliers and minimise the impact of price hikes on customers. Other areas of the industry have not been so efficient. “I don’t condone what some hotel operators are doing in Dublin,” remarks the CEO. “Price gouging is indefensible and wrong. I think it’s doing the industry a lot of damage. Customers need to vote with their feet. A lot of the areas of the sector we’re talking about are not members of the Irish Hotel Federation. They are hostels, self-catering accommodation, Airbnb’s. But they appear on Booking.com.”
O’Driscoll believes the government is in part responsible for high prices and reduced bed stock, particularly in the capital. In April and May of 2022, the government took some 8,000 beds out of the Dublin market to accommodate refugees from Ukraine, leading to diminished capacity.
The CEO is “proud Ireland is doing its part for the Ukrainian people. We support them. I don’t want to see a situation where we don’t have accommodation for Ukrainian people in the country. But I’m calling on the government to work harder to find alternative accommodation so the hotel sector isn’t carrying this burden on its own. The government needs a medium-term strategy and I don’t think they have one. There are up to 10,000 beds in Dublin controlled by the government/local authorities at the moment. It’s hugely damaging to our international tourism recovery.”
O’Driscoll’s dual role in iNUA and Cliste gives him a wide overview of the needs of the hospitality industry. Under his Cliste mantle, he and partner Paul Fitzgerald manage iNUA’s eight properties and three other hotels on behalf of individual owners: Fairways Hotel in Dundalk, the Dublin One Hotel, which is close to Cork Park, and Ariel House Hotel, next to Lansdowne Road. Last year, iNUA’s eight hotels had 75% occupancy, up on 2019 and revenues grew about 15% from €56m to €64.5m.
During COVID, between 2020 and 2021, iNUA experienced €70m in lost revenue, so 2022’s result was a pleasant surprise. It was driven, remarks the CEO, by the strength of these properties in the domestic leisure market. There was a huge backlog in weddings after COVID. In 2022, 428 weddings were conducted across the group. Food and beverage was strong. Why? Because people wanted to get back out and dine after two years of lockdowns.
International and corporate business lagged behind, with multi-national corporateeventually picking up in September 2022. That business has now recovered. “Quarter four was very good for conferences and meetings. Companies were getting their teams together again for training, business planning, and social events. In 2023 we’re seeing strong recovery in corporate business.”
iNUA and Cliste have a pipeline of hotel purchases and management contracts in store for 2023. Last year, Cliste purchased The Viaduct, a bar and restaurant in Bishopstown, Cork, which the group redeveloped into a restaurant, cafe and food store. The outlet opened in September 2022 and is trading well.
“Cliste recruited David Jordan as director of strategy, research and innovation. David has helped us look wider than just hotels. We are expanding outside traditional hotels and looking at the wider hospitality and tourism space. A lot of people in the Cliste team have worked in various areas of hospitality: bar groups, restaurant groups, self catering and other tourism products. So now we’re looking at wider hospitality product development.”
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