Dalata Hotel Group has launched a strategic review of its business – a move that could ultimately see the group being sold, or broken up.
The review of the Irish stock market listed company comes at the request of the senior leadership team at Dalata, apparently frustrated with a languishing share price, and challenges around funding planned growth. Consultants Rothschild & Co have been hired as financial advisors, with a brief to find the best ways to “optimise capital opportunities for the group and to enhance value for shareholders”. A potential sale could be one way to maximise the return for those shareholders.
Almost two decades of growth
Dalata was created in 2007, initially working as a hotel management company. It since built a network of owned and leased hotels under its own two brands, Clayton and Maldron. Today, the group is Ireland’s largest hotel company, with a strong presence also in four star hotels across the UK and a growing portfolio in mainland Europe.
Altogether, Dalata has 55 hotels under its operations, which include 30 that are owned by the group. These have been valued at EUR1.7 billion. Of the remainder, 22 are rented on long term leases, with an average of more than 29 years remaining. Finally, three hotels are operated on management contracts.
The Dalata board pointed to several structural challenges for the company currently. These include “its relatively small scale in a public market context, its relatively concentrated shareholder register, a constrained capital base in the context of its growth ambition.” There is also a concern that the share price fails to reflect the real value of the business, and its future prospects.
Announcement of the review came as Dalata revealed its 2024 performance. Revenues grew 7.3% year on year to EUR652.2m, while profit after tax was EUR76.7m.
The group previously announced its 2030 Vision plan, which aims to grow the portfolio to 21,000 rooms by 2030, representing an 80% growth on the company’s current scale. It has said it will look to acquire existing hotels, as well as develop new properties. Since announcing its plan in October 2024, Dalata has already acquired the Radisson Blu hotel at Dublin airport, paying EUR83m for the asset.
Two more hotels have recently been signed under lease contracts. A new 154 room Clayton hotel will be developed in the City of London, as well as a 256 room hotel in Morrison Street, Edinburgh, which will be the group’s second property in the city.
Continuing to grow
Current pipeline projects include one Irish hotel, Maldron Croke Park in Dublin, and Clayton Hotel St. Andrew Square, Edinburgh which is under construction. In Dublin, Dalata is already a major presence, reckoned to own or operate around 20% of the city’s hotel room inventory.
Dalata has made no secret of its ambitions for growth in mainland Europe. So far, it has added a hotel in Dusseldorf, Germany and in Amsterdam it acquired the former Hard Rock hotel, which has been rebranded to its Clayton brand. Further gateway cities are being targeted for additional growth.
