The five-star Shelbourne Hotel in Dublin last year took a €30 million revenue hit due to the impact of Covid-19 on the economy, according to accounts just lodged for the company that operates the property.
The Shelbourne’s income declined by 71 per cent from €42 million to €12.2 million.
Pre-tax losses at KW Shelbourne Ops Ltd last year increased to €8.52 million on the back of declining revenues compared with a deficit of €650,000 a year earlier. The firm’s loss last year takes account of non-cash depreciation costs of €4.94 million.
The directors state in the accounts that the reduced turnover was as a result of Government-imposed lockdown restrictions in response to the Covid-19 pandemic.
The directors state that since the hotel reopened in June 2021 “domestic trade has been robust and the return of international guests has commenced”.
They remain confident that “the company will return to a strong trading position as international guests return to pre-pandemic levels and functions can return to full attendance”.
The hotel is owned by an entity connected to Kennedy Wilson, the California-based real estate investment group.
The accounts disclose that KW Irish Real Estate VII granted a major concession on the lease payments in light of the enforced closure of the hotel due to Covid-19 restrictions. This followed a rent review in the middle of 2019.
The cost of the five-year lease reduced from €43.2 million on January 1st 2020 to €13.3 million at the end of December 2020. This reduction comprised a lease concession of €26.2 million and a depreciation charge of just more than €3.7 million.
In 2014, US real estate specialists, Kennedy Wilson assumed control of the St Stephen’s Green hotel when it paid €110 million for the debts attached to the property.
The staff costs for the operation of the hotel are borne by a separate company, Torriam Hotel Operating Company Ltd, which has a contract to manage the hotel until 2026.
