Dalata Hotel Gp Regulatory News (DAL)

Trading ahead of expectations

Revenue to exceed €0.5 billion as expansion continues

ISE: DHG              LSE: DAL

Dublin and London | 14 December 2022: Dalata Hotel Group plc ("Dalata" or "the Group"), the largest hotel operator in Ireland, with a growing presence in the United Kingdom and continental Europe, is pleased to announce that the strong recovery in trade, as previously reported, has continued in the second half of the year. Annual revenue is expected to exceed €0.5 billion for the first time in the Group’s history. Adjusted EBITDAi for the year ending 31 December 2022 is expected to be in excess of €182 million (2019: €162 million).

‘Like for Like’ Group RevPARii was 21% ahead of 2019 levels for the September to November 2022 period, with all of the Group’s regions performing well. Corporate bookings have picked up after the summer period; there is continued strong leisure demand and a notable increase in North American visitors supported by the favourable USD exchange rate. Supply in Ireland remains constrained due to rooms in use for government related business, primarily the provision of emergency accommodation for refugees. The timing and degree to which these rooms will return to the market remains uncertain.

The Group’s new hotels are performing ahead of our expectations. Occupancy for the September to November period was 79% for the seven hotels added to the Group between August 2021 and September 2022. Dalata is rebranding the Hotel Nikko Düsseldorf to Clayton Hotel Düsseldorf in December and the Group is excited about the opportunities this will provide.

The business energy supports in Ireland and the UK are welcomed. Due to the impact of these and other factors, we now expect gas and electricity costs for 2022 to be approximately €32 million (versus previous guidance of €34 million).

The Group is cognisant of the cost-of-living challenges and has announced pay increases of 6.5% for employees earning below €13/£13 per hour and 4% for those earning above this level, effective from 1 January 2023.

The Group is cautiously optimistic on its outlook for 2023. Engagement with corporate customers and tour operators on demand and pricing has been positive. There are also positive demand indicators in Ireland and the UK, including on the resumption of more normalised conference business levels and the continuing return of international travellers, in particular from the US market. We continue to monitor the macro-economic backdrop and any potential for a slowdown, most notably in domestic leisure demand. However, we are not seeing any such indicators in our trade levels to date.

The Group also continues to develop its pipeline hotels with the construction of our Maldron Hotel in Shoreditch, London progressing well and scheduled for completion in December 2023. The Group also has three more UK Maldron Hotels under construction in Brighton, Liverpool, and Manchester, all scheduled to open in Q2 2024. Maldron Hotel Croke Park, Dublin is scheduled for completion in H2 2025.

Dermot Crowley, CEO, Dalata said:

“2022 has been a very successful year for Dalata where we demonstrated our ability to bounce back from the challenges of Covid-19. I am very pleased with how we managed the recovery in trade of our existing hotels, opened six new hotels and added our first hotel in continental Europe. We are proud to have recently opened our 50th hotel with the completion of Clayton Hotel Glasgow City.

We remain mindful of global inflationary cost pressures and the potential impact on consumer discretionary spending. We will continue to focus our efforts on protecting and growing the business sustainably as we have always done.

Our people remain top of our agenda. It is through our dedicated teams that we ensure our consistently high service standards. We are making efforts to alleviate the cost-of-living challenges for our people through meaningful pay increases and the provision of one-off vouchers. We also continue to provide other benefits important to our employees including quality staff meals, enhanced holiday leave and support through our Employee Assistance Programme, as well as maintaining our investment in training and career development.

We continue our investment in sustainability and are delighted to have received the Gold Award from Green Tourism across all 48 tested hotels in our portfolio throughout Ireland and the UK. This is an important milestone in our green journey and is testament to all the efforts of our teams across the Group.

Despite macroeconomic uncertainties, we remain confident in our ability to outperform with our well-invested product, ESG focus, decentralised operating model and track record of providing an excellent guest experience. As we look ahead, Dalata’s robust balance sheet, financial resources, pipeline of talented people and excellent reputation position us strongly for further growth. The future is bright for Dalata and I am excited about the Group’s opportunities and prospects.”

-ENDS-

About Dalata

Dalata Hotel Group plc was founded in August 2007, listed as a plc in March 2014 and is now Ireland’s largest hotel operator, with a growing presence in the UK and continental Europe. The Group is a vertically integrated hotel owner operating two primary hotel brands, Clayton Hotels and Maldron Hotels. The Group’s portfolio comprises 50 primarily 4-star hotels situated in city-centre locations with over 10,950 rooms across 29 owned hotels, 18 leased hotels and three management contracts. The Group has ambitious expansion plans for the UK and continental Europe with a committed pipeline of 1,125 rooms. For the first six months of 2022, Dalata reported revenue of €220.2 million and a profit after tax of €46.7 million. Dalata is listed on the Main Market of Euronext Dublin (DHG) and the London Stock Exchange (DAL). For further information visit: www.dalatahotelgroup.com

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i EBITDA adjusted to show the underlying operating performance of the Group and excludes items which are not reflective of normal trading activities or distort comparability either period on period or with other similar businesses.

ii RevPAR KPIs are stated on a ‘like for like’ basis and include a full period performance of all hotels regardless of when acquired. KPIs for the Dublin portfolio exclude the Ballsbridge Hotel, as the lease matured at the end of 2021 and the three hotels added in 2022 (The Samuel Hotel, Maldron Hotel Merrion Road and Hotel Nikko Dϋsseldorf). KPIs for the UK portfolio exclude the Clayton Crown Hotel which was sold in June 2022 and the five new hotels added during 2021 and 2022 (Maldron Hotel Glasgow City, Clayton Hotel Manchester City Centre, Maldron Hotel Manchester City Centre, Clayton Hotel Bristol City and Clayton Hotel Glasgow City).