The chief executive of the Hodson Bay Hotel group said he is “very happy” with its 2022 financial performance but he expects revenue growth to be minimal in the coming year as the hospitality sector struggles to maintain its competitiveness.
Accounts filed recently for Shermond Holdings, a holding company in the group that operates the Hodson Bay Hotel in Athlone, Co Westmeath, along with the Sheraton Athlone Hotel and the Galway Bay Hotel in Salthill, Co Galway, show its revenues expanded by more than 72 per cent to more than €37.8 million in the year to the end of February last.
The O’Sullivan family-owned group, which also operates the Hyatt Centric Hotel in Dublin through a separate company, has been in recovery mode in recent years after revenues plunged by more than €20 million to just €11.6 million in the Covid-hit 12 months to the end of February 2021.
Revenues rebounded to €21.8 million in the 12-month period to February 2022 before jumping to €37.8 million throughout 2022 and into 2023, ahead of pre-Covid levels.
Pretax profits, meanwhile, topped €4.5 million in Shermond’s recent financial year, down slightly compared with €4.8 million the previous year due to a notable increase in its cost base.
The group’s sales costs – including wages and salaries – climbed more than 250 per cent to €17.7 million with its wage bill up more than €3 million to €13.7 million.
The hotel group also received Government grants totalling €204,268 in the year, down from €484,308.
Is the restriction on passenger numbers at Dublin Airport doing untold damage to our economy?
Padraig Sugrue said occupancy level floated at about 80 per cent for the year as domestic tourism and eventually foreign tourism recovered throughout the 12-month period to the end of February 2023.
He said the group was “very happy” with the recovery it experienced and 2023 was another positive year as global travel recovered, pushing revenues up a further 5 per cent.
For 2023, “we wouldn’t be factoring in huge growth”, he said, however. “Higher occupancy levels means you have to struggle to remain competitive,” Mr Sugrue said, against the backdrop of elevated costs, particularly wages and salaries.
While he said he does not expect room rates to soften much this year, growth will be “minimal” in 2024 amid cost challenges. Mr Sugrue said there must be “a strong focus” on the needs of smaller tourism businesses like restaurants and cafes to protect them from failure.
- Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Find The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
