Ireland's biggest hotel operator Dalata has acquired the Clayton Hotel and Whites Hotel in Wexford for €31.7 million in cash, the group confirmed on Wednesday.
Both hotels, marketed by CBRE as part of the Ulster Bank Project Nadal, have been operated by Dalata since 2009 under management contract.
Earnings before interest, tax, depreciation, amortisation, rent and management fees (Ebitdar) for the two hotels last year was €2.5million.
The transactions are expected to be completed within one month, Dalata said.
The Clayton Hotel is a 4- star hotel located close to the Ballybrit Racecourse and Galway Clinic, on the outskirts of Galway city centre. The hotel contains 195 rooms as well as a bar/bistro, a restaurant, conference facilities, a ballroom and 10 meeting rooms. Whites Hotel on Abbey Street in Wexford Town is also a 4-star hotel which has 157 rooms.
Although a well-known landmark in Wexford, Whites got a new lease of life when it was redeveloped and enlarged at a cost of €55 million in 2006.
The chairman of the Dimplex group, Martin Naughten, was among 20 investors who invested in the hotel as part of a tax scheme. The investors put varying amounts into a €9.6 million fund that formed part of the scheme behind the construction of the hotel. The fund then borrowed €32.5 million from Ulster Bank towards the project.
The investors were then able to claim the €42.1 million back against the work on the hotel against their personal tax liabilities over the years following completion of the hotel.
Dalata announced revenues that were 31 per cent higher for the first half of the year, as the group benefited from strong growth in the tourist sector and an improvement in domestic consumer sentiment.
In the six months to June 30th, earnings at Dalata rose to €2.4 million from € 0.9m in the same period in 2013, while pre-tax profits stood at €943,000, up from a loss of €1.7m in the same period in 2013.
Dalata’s revenue comes from the operation of a mix of owned and leased hotels and from fees for hotel management services provided to third party owners under management agreements.
“We are delighted to have secured Whites Hotel, Wexford and the Clayton Hotel, Galway, two outstanding modern hotel properties with excellent conference facilities. We look forward to continuing our work with the management and staff at both properties to realise the full potential of both hotels in the years ahead,” said Dalata chief executive Pat McCann.
“These acquisitions are part of our strategy to assemble a portfolio of high quality hotel assets in Ireland,” he added.
