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Foreign business travel missing ingredient for Irish hotel recovery – Dalata
Global Banking & Finance Review®
Company
By Padraic Halpin
DUBLIN (Reuters) – Executives at Ireland’s large hub of multinational companies are still only going on a small fraction of the foreign business trips they made before the COVID-19 pandemic, the head of the country’s largest hotel operator said.
Dalata Hotel Group, which has the Maldron and Clayton brands, said on Wednesday a strong rebound in leisure travel following the lifting of COVID-19 restrictions pushed first half revenue, average room rate and profit above 2019 levels.
Chief Executive Dermot Crowley said that despite the fall in foreign business travel, corporate demand managed to return towards levels last seen before the pandemic, with domestic business travel and new business making up for the falls elsewhere.
“The big unknown is that multinationals, (who were) our big customers pre-COVID, are not travelling anywhere near the same level as they were pre-COVID,” Crowley told Reuters.
He said he would carefully monitor whether Apple’s call for workers to partly return to the office would lead to more travel.
Ireland is the European base for technology companies like Google, which, alongside pharmaceutical groups such as Pfizer and Abbott, are among the country’s largest employers with the sector accounting for about one-in-nine workers in Ireland.
Central Statistics Office data on Tuesday showed overseas arrivals into Ireland in July were 12% lower than pre-pandemic levels.
Dalata’s first-half 2022 revenues rose almost six-fold from the COVID-19 hammered first half of 2021 and were 9% higher than 2019 at 220 million euros, aided by a 15% rise in average room rate over the same period.
Core profit jumped 14% compared with 2019, with like-for-like group revenue per available room (RevPAR) – a key measure of a hotel’s top-line performance – up 5%. Strong trading continued in July and August with occupancy back at pre-pandemic levels.
Crowley said leisure demand looked strong for September but that the group had little visibility beyond that with most bookings typically made within six weeks of travelling.
While Dalata has not seen any impact on demand to date from sharp rises in the cost of living, it said inflationary costs may impact consumer discretionary spending in the future.
(Reporting by Padraic Halpin. Editing by Jane Merriman)
Business travel refers to trips taken for work-related purposes, often involving meetings, conferences, or client engagements, as opposed to leisure travel.
Corporate demand refers to the need for services or products by businesses, often influencing market trends and economic recovery, particularly in sectors like hospitality.
Economic recovery is the process of growth and improvement in economic performance following a recession or downturn, characterized by increased production, employment, and consumer spending.
Revenue growth is the increase in a company's sales over a specific period, indicating improved business performance and market demand.
The hospitality industry encompasses businesses that provide services related to lodging, food, and entertainment, playing a crucial role in tourism and economic activity.
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