David Kelly, FBD Hotels “Our people are the lifeblood of our business”

Monday, June 24, 2024. 10:06am
David Kelly FBD Hotels Our people are the lifeblood of our business

“Our people are the lifeblood of our business”

David Kelly, CEO of FBD Hotels & Resorts, talks about how the hotel group’s unusual evolution set it apart from competitors and created an unrivalled brand.

The success of FBD Hotels & Resorts is easily measurable. In 2023, the Irish owned hotel, golf and property development group earned €25m in operating profit. Four years beforehand, in 2019, that profit was measured at €11m. This one hundred percent growth was quantifiable – 72% organic and 28% attributable to the purchase of Killashee Hotel in 2022. It can also be attributed to FBD’s innovative and forward-thinking perspective. This group has a purpose and a strategic vision that makes it the envy of other hotel operators.

FBD currently consists of four hotels across Ireland: Castleknock Hotel in Dublin; The Heritage Hotel in Laois; Faithlegg in Waterford; and Killashee in Co. Kildare – and two resorts in Spain, La Cala Resort and Sunset Beach Club (both located on the Costa del Sol). La Cala was voted the best golf resort in Spain a few weeks ago by international golf tour operators. Sunset Beach (which has nearly 600 bedrooms) made €10.5m profit from €30m in revenue in 2023. Life is good at FBD but nobody here is resting on their laurels.

“It’s been great to see the evolution of the group and where we’ve come to,” says David Kelly, CEO of FBD Hotels & Resorts, in a sit-down interview with H&R Times.

And what an evolution it has been. The roots of the group can be traced back to 1969, David explains, when the Irish Farmers’ Association collected share capital from individual farmers around Ireland. “They wanted to follow the model of the National Farmers Union in the UK. They felt that Irish farmers should have their own insurance company.”

David Kelly FBD Hotels Our people are the lifeblood of our business

Those contributions were used to establish FBD Insurance and other companies. As part of the investment, the group purchased 1,000 acres in the footholds of the Mijas Mountains outside Málaga, which would eventually evolve into La Cala, and a hotel that would become Sunset Beach. In 1988, following a corporate restructuring, FBD became a stock exchange company.

David Kelly entered the picture a few years later. Born in Co. Kildare, in 1968, he studied commerce at UCD before graduating in 1988 to go on to train as a charter accountant. In 1992, while working at Deloitte, FBD offered him a job when he conducted an audit for them. His first assignment was at the Spanish property but he was back in Dublin by 1995 to work at the head office. “For a number of years, I worked in the non-insurance part of the group”.

In 2015, the insurance wing sold its remaining 50% share in the property and leisure side of the business back to the farmer shareholders. Now Farmers Business Development has full ownership of FBD Hotels & Resorts. “So, we became 100% autonomous from the insurance company in 2015,” says the chief executive. “It enabled us to create a clear vision.”

That vision was to grow its portfolio of luxury four- and five-star hotels and resorts – and the plan worked from the word go. In 2016, FBD reported a 14% increase in pre-tax profit to €7.2m. Two years later, the group acquired its first five-star premises: the Heritage Hotel and Spa in Co Laois, for approximately €9m.

In 2022, FBD’s horizons widened further with the purchase of Killashee for €25m from Tetrarch Capital. “When Killashee came onto the market there was quite a competitive bidding process,” recalls David. “A lot of parties wanted it. There were 10 or 12 bidders on that property. After purchasing, we refurbished 129 bedrooms there within 6 months”

FBD has a reputation as a first-class hospitality employer for good reason. The group employs 1800 people (600 in Spain, 1200 in Ireland) and places emphasis on the employee value proposition (EVP):  attracting, retaining, training and developing staff. “We like to reward our staff with a good salary, good bonus, good terms and conditions. We have long-term incentive plans for people if they’re still with us after three years. They share in the success and that’s a way of retaining good people. We value them and they feel valued.”

David Kelly FBD Hotels Our people are the lifeblood of our business

Being an employer in 2024 is not easy. New labour market policies – including the commitment to a Living Wage by 2026, the introduction of pension auto-enrolment, statutory sick pay, and increases of employers PRSI – will add to annual employer wage bills. But this hasn’t discouraged FBD Hotels & Resorts. “Even though our labour costs are set to increase by up to 30%, I’m not against it,” says David. “We have to treat our people very well – it’s the only way we’ll attract good people in our industry. They’re the lifeblood of the industry.”

FBD Hotels & Resorts has programmes within its hotels such as Grow and Climb, which encourages employees to work their way up the ladder – and there’s plenty of precedent in the group that proves this works. Eddie Flynn, for example, started working in the group at 17 years of age – he’s now the General Manager of Faithlegg.

In 2021, FBD Hotles & Resorts conducted a strategic review with the goal of mastering the 4-star superior space within the hospitality market. “We want our capital assets to earn good returns and deliver dividends to our shareholders.” This strategy involved 50 people from the group, not just at board level but also GM’s and heads of departments. There is logic in this approach.

“We did massive work with everyone in setting our strategy going forward,” continues David. “All these people know our business better than anyone. I’m not meeting the chef who’s out there dealing with the food supplier and trying to get the best deal, or the GM who’s dealing with an HR issue. These people are living and breathing those issues, so we have to involve them in our strategy. They are the lifeblood of our business.”

Four strategic pillars emerged from that strategy review: investment; people and culture; IT and innovation; and the guest experience. “These four pillars have to be forefront in our thinking for every decision we make. If those four pillars don’t sit together then it won’t work.” FBD have since added a fifth pillar: climate and the planet.

In order to reach their net zero targets, FBD have created a new role – group head of sustainability – and commit 20% of their annual capital expenditure to sustainability (which amounts to between €1.5m and €2m). The Corporate Sustainability Reporting Directive (CSRD), European legislation, has over 1000 data points. “In 2026 we have to go through all those points and isolate which ones we have to report on. Compliance is vital. We’re buying a digital data platform that all our sites feed into to measure environmental output.”

David Kelly FBD Hotels Our people are the lifeblood of our business

But the CEO knows that these environmental aspirations need not be a burden. In fact, they are an opportunity for adding value. “In Spain, for example, we invested €500,000 on solar panels at La Cala last year. It’s cut our electricity in the golf clubhouse area by 50%. We have the biggest electric buggy fleet in Europe. We have 210 electric – lithium and LED – buggies. Not only has solar cut down on energy costs, but because of the lithium battery technology, one buggy can be charged in less than an hour every morning and can do two rounds of the course. The LED can only do one. We did 130,000 rounds of golf in La Cala last year. We’ve turned lithium electrical technology into a real opportunity for us. In 2024, we’re planning on starting a big solar project at Killashee Hotel in Co. Kildare.

ESG (Environmental, Social, and Governance) – a set of criteria that investors use to evaluate a company’s impact on the environment – is now streamlined into FBD’s expansion plans. David Kelly explains: “When we’re looking at an opportunity to buy a hotel now, not only do we have our normal parameters that we have to tick off, but we have a separate ESG consideration. We have to refurbish rooms, common areas, conference rooms [in a newly purchased property]. But what do we need to spend on it to bring it up to an ESG standard?”

Growth is on David’s mind. FBD’s properties in Spain have reached their quota for the time being. “I can’t see us buying anything new in Spain because we’ve a big land bank to develop at La Cala – a plot there to extend the hotel – so we can grow organically in Spain.” But FBD are eyeing new opportunities in Ireland.

The group will take these opportunities as seriously as every other aspect of the business. “I don’t like talking the talk, whether it’s around our people, our investments or anything else,” says David. “We prefer to walk the walk. Let’s take action and then commit to it.”


Share this:

Explore topics: