Dalata puts UK expansion plans on hold after Brexit

HOTEL MANAGEMENT recently looked into possible repercussions Ireland's hotel industry might face in the wake of the Brexit—and now some of those effects have started. Ireland's Dalata Hotel Group—which currently has more than 7,500 rooms across 40 owned, leased and managed hotels—has put its expansion plans for the U.K. on hold following the referendum, according to CEO Pat McCann.

“We had plans to develop in the U.K. and we still feel that will happen, but it would be unwise to make any decisions until we get some indication what’ll happen in the U.K.,” McCann said, confirming comments attributed to Dalata’s management in a note from German investment firm Berenberg. The company plans to "carry out a full assessment of the impact of Brexit" before deciding whether to roll out further in the U.K.

But Dalata is still going strong in Ireland, with plans to develop up to 1,000 rooms by 2018. Fewer than 1,800 of its rooms are in the U.K.

Berenberg analysts expressed optimism for Ireland's hotel market, and for Dalata as a business. “We estimate Dalata will generate double-digit [revenue per available room] growth in both Dublin and regional Ireland this year, with solid growth continuing further out.”

Berenberg estimates Dalata’s sales will rise to €336 million in 2018 from €226 million last year, with earnings before interest and tax surging 70 percent over the same period, to €90 million.

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