Profit at Ireland's largest hotel group, Dalata, was ahead by 80% to €32.7m over the six months to the end of June. Revenue was up 24% to €161.8m. The group says it spent €17.1m in new builds and extensions to properties during the six months. In a statement alongside the results Dalata noted that Dublin, one of its key markets, has seen a dropoff in visitor numbers from the UK due to the weakening of sterling since the Brexit vote but, it says, this has been more than offset by an increase in visitor numbers from North America and other European countries.
Dalata Hotel Group's chief executive Pat McCann said the strength of the euro against sterling is something the company is keeping an eye on. But he added that the company is not as exposed in the Irish context to sterling fluctuations compared to a lot of hotels as those hotels are very dependent on transient UK traffic. Dalata has a wide spread of tour business, corporate business and leisure business. But at the same time, the company's UK performance saw €1m lost when translating between currencies in the current half year.
A Crowe Horwath survey out last week put average room rates in Dublin at €128, past the previous peak in 2006 and up 15% year-on-year. Mr McCann said that Dalata's average price for a room is €112 for Dublin, well behind the market rate. This is due to the fact that the company's business mix is different as it has a lot of long term forward contracts with tour operators and corporates, which dilutes the average rate. The hotel group CEO said the company has to be mindful about remaining competitive and can't do anything stupid like pricing itself out of the market. He said the company is always looking to the more long-term sustainable business model that will drive the business well into future.
Mr McCann said he is seeing no slowdown in the tourism market for the rest of this year and early into 2018. He said the European tourism market is performing very well and the company is getting more in line to where it should be in terms of European visitors - as well as visitors from further afield including Australia and China. The hotel boss said the country's dependancy on our two main markets - the US and the UK - is becoming less and so the risk to Ireland and its tourism product is less. But we have to work harder at doing lots of things better that we would have done so, he added.
MORNING BRIEFS - Housebuilder Cairn Homes has commitments from buyers for 474 units in its forward sales pipeline. The value of that order book is €188m suggesting average revenue of just under €400,000 per unit. Half year results for the six months to the end of June show Cairn had revenue of €41.2m up from €25.2m in the same period last year. Cairn, which recently paid over €100m to purchase part of the RTÉ site in Dublin, says it has ramped up activity and is now building at nine separate sites - mostly in the Greater Dublin area - compared to five this time last year. Those nine sites will deliver 3,250 new homes it says.
*** The Investec services PMI for August, the latest in the monthly series which measures activity and sentiment, shows continued growth overall but a slowdown in the pace of expansion in new export orders. The PMI covers business services, financial services, telecoms and tourism and leisure. Investec's Philip O'Sullivan said the slowdown in export order growth across the sector may be influenced by the recent strengthening of the euro. Investec notes that the financial services sector saw its first monthly contraction in exports since October 2012.
*** Media billings at Irish advertising agencies rose last year by 11%, according to research conducted by the Institute of Advertising Practitioners in Ireland. According to figures provided by 12 agencies to IAPI, billings were up from just under €450m in 2015 to €497m last year. The proportion of income coming from international business was dramatically higher at 27% compared to 11% in 2015. IAPI says members are not as confident as they were this time a year ago, however. Last year 74% of survey participants expected turnover to increase. That has now fallen to 58%.
*** Box-office returns in the US in August were 35% lower than in the same month last year. Hollywood studios suffered as cinema goers stayed away from big budget releases such as The Mummy and Transformers: The Last Knight. The risible August performance meant returns in North America for the crucial summer holiday period were 16% lower year-on-year. The Labor day weekend, which has just passed and is traditionally one of the busiest weekends of the year for multiplexes, was the worst in 17 years.