Dalata announces €30m share buyback despite ‘softer trading’ at hotel group

Ireland’s largest hotel group Dalata has announced a €30 million share a buyback and recommended an interim dividend payment of 4.1 cent per share despite seeing more “measured” consumer behaviour in recent weeks, its chief executive has said.
In interim results published on Wednesday, the Dublin-listed group said revenue per available room (RevPar) – a key profitability metric in the hotel industry – grew by just 1 per cent in the six months to the end of June to €110.77.
Average room prices, meanwhile, increased by 2 per cent to €142.67 despite a slight decline in room occupancy levels from 78.4 per cent in the first half of 2023 to 77.6 per cent this year.
In Dublin, Dalata chief executive Dermot Crowley said the hotel sector has faced challenges in the past year with RevPar down 5.4 per cent across the market in the seven-month period to the end of July amid a 9 per cent increase in the number of rooms available in the city and the normalisation of the VAT rate for hospitality in September 2024.
Against this backdrop, he said Dalata was “delighted” to outperform the Dublin market with RevPar down just 4.6 per cent in the city over the period. Mr Crowley said room revenues in Dublin increased year-on-year by 5 per cent in August “on the back of a strong events calendar”.
The outlook for the Dublin market “remains very encouraging”, Mr Crowley said, supported by rising population figures and “strong international visitor numbers”.
However, he warned that the 32 million passenger per year cap at Dublin Airport, which DAA on Wednesday said will be surpassed in 2024, is an “important issue for business”. Mr Crowley said Dalata remains hopeful a resolution will be reached in the short term.
Announcing the new €30 million share buyback programme, Mr Crowley said Dalata is focused on “creating long-term value for our shareholders” and the group believes the time is right to return value to them.
“We continue to deliver on our ambitious growth strategy, having successfully opened four new hotels in the UK between May and August,” he said. I am very proud of the results we have achieved to date which evidence our ability to deliver growth in the UK market, having expanded our UK portfolio from 11 to 22 hotels within three years.”
Both in the UK and Ireland, however, Dalata said trading has been “softer” trading in recent times amid a return to more “measured domestic customer spending behaviour”. This impacted business levels, particularly across Dalata’s regional Irish portfolio of hotels where Revpar declined slightly from €99.74 in the first half of 2023 to €97.71 in the first half of 2024.