Dalata targets 15% of UK hotel market
The Dalata Hotel Group is targeting a 10%-15% share of the regional hotel market in the UK.
The group, which is market leader in Ireland through its Clayton and Maldron brands, has already said it is targeting openings in 20 key regional cities throughout Britain — including Edinburgh, Bristol, Brighton, Manchester and Milton Keynes. It already operates hotels in Cardiff, Leeds, London and Manchester.
Earlier this week, Dalata — whose shares were down 3% yesterday — announced plans for its first Scottish-based hotel via a new build in central Glasgow. In all, the group is looking at adding 8,000 rooms to the UK hotel market over the next five-to-seven years.
Dalata’s management told analysts at its capital markets day, this week, that it is aiming to be the leading three and four-star operator in such cities and is targeting a 10%-15% share of that segment of the market in those locations.
“Our scenario, which assumes just 7,000 rooms, values Dalata’s UK opportunity at an extra €1.40 per share, implying total medium-term upside of 30%,” said Davy analysts Joseph Quinn and David Jennings in a joint research note.
Davy also suggested the IFRS-16 accounting standard, which focuses on the accounting of leases, will impact Dalata’s bottom line going forward but won’t restrict its ability to invest in more leases.
In September, Dalata reported an 80% annualised rise in first-half pre-tax profits to nearly €33m and a 24% rise in revenues to €161.8m, adding that it’s UK hotels had performed strongly during the period.
