Dalata Hotel Group PLC: FY 2024 Results

FY 2024 Results

Dalata delivers strong trading performance and paves the way to 21,000 rooms by 2030

ISE: DHG   LSE: DAL

Dublin and London | 6 March 2025: Dalata Hotel Group plc (‘Dalata’ or the ‘Group’), the UK and Ireland's largest independent four-star hotel operator, with a growing presence in Continental Europe, announces its results for the year ended 31 December 2024.

Attractive and strongly performing portfolio continues to deliver in 2024

• Revenue of €652.2 million, up 7.3% on 2023 with Adjusted EBITDA1 of €234.5 million, up 5.1%, supported by additions to the portfolio in 2023 and 2024.
• ‘Like for like’4 RevPAR1 of €115.78, up 1.0% versus 2023. Trading was stronger in H2 overall, while the Dublin portfolio outperformed the wider market for 2024.
• Despite significant statutory wage increases in Ireland and the UK (up 12.4% and 9.8% respectively versus 2023), ‘like for like’4 Hotel EBITDAR margin1 was 40.9% (2023: 42.3%) – impact of cost inflation was halved due to innovation and efficiency projects (75 bps “saving”) and lower year on year energy costs (65 bps “saving”).
• Despite the increase in Adjusted EBITDA1, profit after tax decreased by €11.5 million (12.7%) to €78.7 million due to below EBITDA1 increases in accounting charges from the refinancing and portfolio growth.
• Free Cashflow1 generation, after refurbishment capex and finance costs of €123.7 million (55.8 cent per share).

Portfolio

• Hotel Assets1 of €1.7 billion at 31 December 2024 - 73% of value is located in Dublin and London.
• High quality long-term leases - weighted average lease term of 29.0 years remaining (excluding the impact of Clayton Hotel Manchester Airport which holds a 200 year lease).

Capital Allocation

• Refinanced ahead of 2025 end date securing €600 million debt package in 2024 with increased level (+20%) and widened the pool of funders including a €124.7 million inaugural private placement.
• Strong financial position with Net Debt to EBITDA after rent1 of 1.3x at 31 December 2024 and cash and undrawn loan facilities of €364.6 million (31 December 2023: €283.5 million).
• Focused on returns to shareholders – returned €27.1 million through dividend payments in 2024, €55.0 million of share buy backs between September 2024 and January 2025 and proposing further dividend today.
• The Board has proposed a final dividend of 8.4 cents per share (c. €17.8 million in total), 5.0% growth on the 2023 final dividend of 8.0 cents per share.

2030 Vision: targeting 80% growth to 21,000 rooms by end of decade

• The Dalata ambition is to become the leading hotel operator in the four-star segment of all target cities in Ireland and Regional UK with a growing presence in London and Continental Europe.
• 2030 Vision to reach 21,000 rooms by 2030 (+80%) will be achieved through our disciplined investment strategy combining acquisitions of existing hotels and development of new hotels and a balanced mix of leasehold and freehold ownership. Dalata have increased the pipeline by 910 rooms since announcing the target in October 2024:
  • Acquired Radisson Blu Hotel, Dublin Airport for €83 million (subject to CCPC2 approval), which includes significant development potential;
  • Secured agreement for lease for the development of a new Clayton Hotel on Old Broad Street, London (154 rooms);
  • Secured our second hotel in Edinburgh in January 2025 with an agreement for lease for a new Clayton hotel (256 rooms) to be developed at 60 Morrison Street, ideally located next to the Edinburgh International Conference Centre. The all-electric building will include state-of-the-art heat pump technology and target a BREEAM excellent accreditation and is expected to open in H1 2028 (subject to planning).
• Opened four new Maldron hotels (838 rooms) in 2024 expanding the UK portfolio to over 5,000 rooms.
• Announced pipeline of over 1,600 rooms – the Maldron Hotel Croke Park, Dublin and Clayton Hotel St. Andrew Square, Edinburgh now under construction.
• Commitment to portfolio review resulted in disposal of two freehold hotels in Wexford, Ireland for €29.6 million, delivering an attractive return for shareholders, €10.8 million over acquisition cost (17% ahead of book value at June 2024, 18% IRR).

The Dalata platform delivers strong trading performance and opportunities for portfolio expansion

• Engaged and skilled people empowered by decentralised model with experienced leadership and management teams.
• Operational expertise with industry leading margins - skilled in revenue management and cost control with a focus on innovation and resulting targeted initiatives which drives operational efficiencies, while also maintaining strong levels of customer satisfaction and employee engagement.
• Expertise and extensive experience in hotel acquisitions, development, and leasing.
• Strong emphasis on learning and development ensures we continue to deliver a great guest experience and provides a pipeline of talent to resource and de-risk new hotel openings.
• Specialised services platform drives high performance at the hotels, enables and de-risks rapid further expansion.
• Compelling, refreshed brands and transformed digital marketing efforts.

Business highlights

• Strong culture and focus on people evident in excellent scores in employee engagement (2024: 9.0, 2023: 8.9) and customer satisfaction (2024: 85%, 2023: 84%).
• Continue to drive revenue and reduce costs through innovation and efficiency programmes:
  • Roll out of a new revenue management system is underway.
  • Implementing new systems including a new CRM system to better manage our corporate sales process, a customer experience platform to better understand the profile and behaviour of our customers, and a new recruitment system with exciting potential to improve the success rates and cost of our recruitment process.
  • Commenced project aimed at reducing rooms commissions.
• Launched major repositioning of our core brands in 2024 reinforced with new marketing campaigns and a customer experience training programme. Positive results to date, with 5% increase in ‘LFL’4 direct room nights booked in 2024 versus 2023, supported also by the consolidation of hotel websites, digital marketing activities and management of social media activities.
• Invested €26.6 million in refurbishment expenditure in 2024, including 346 bedrooms.
• 31% reduction in Scope 1 & 2 carbon emissions per room sold achieved in 2024 versus 2019 which is significantly ahead of a 20% reduction target by 2026.

Outlook

The Group’s ‘like for like’4 RevPAR1 is expected to be 2.5% ahead of 2024 levels for the first quarter of 2025. In particular, the Dublin portfolio had a strong performance following the absorption of supply at the beginning of 2024 with RevPAR1 for the same period expected to increase by 5% versus 2024.

As previously disclosed, the Group estimates that the recently announced changes in UK National Insurance, the increased minimum wage rates in Ireland and the increased living wage rates in the UK will increase hotel payroll by c. 5% in 2025 on a ‘like for like basis’4. As demonstrated during 2023 and 2024, the Group is well positioned to mitigate the effects of inflation. The Group is confident that these additional costs will be mitigated through ongoing efficiency and innovation initiatives and RevPAR1 growth in the market, in addition to the benefit of a €2 million reduction in contracted energy pricing.

The Group is confident for 2025 supported by future demand indicators across its markets, including growing air traffic forecasts and strong event calendars for the remainder of the year. Dalata will also benefit from the full year contribution of the hotels opened in 2024.

Dividends

On 5 March 2025, the Board proposed a final dividend of 8.4 cents per share amounting to approximately €17.8 million. This proposed dividend is subject to approval by shareholders at the Annual General Meeting. The payment date for the final dividend will be 8 May 2025 to shareholders registered on the record date 4 April 2025.

Dermot Crowley, Dalata Hotel Group CEO, commented:

“Since 2021, Dalata has undergone a remarkable transformation. We have grown our portfolio by circa 35% through additions and new openings to almost 12,000 rooms, doubled our UK business, and successfully ventured into Continental Europe. Our brands and marketing processes have been revolutionised, and sustainability is now deeply embedded in our operations. Both our people and customers report higher satisfaction than ever before.

We have created a scalable platform, operating 55 hotels today with Hotel Assets1 valued at €1.7 billion, generating over €650 million in revenue and an Adjusted EBITDA1 after lease payments of €173.2 million. This growth and the significant value delivered to our shareholders are a testament to our dedicated and talented team, strong operating model, robust financial position, and disciplined growth strategy.

In 2024, we again demonstrated our ability to deliver on our ambitious growth plans while also delivering a strong operating performance. We achieved another record level of revenues and continue to convert to a strong bottom-line with Adjusted EBITDA1 growth of over 5.1% to €234.5 million despite significant increases in pay rates. Our focus on innovation has allowed us achieve productivity savings without negatively impacting on our people or our guests. This has enabled us to reduce the impact of cost inflation on our margins.

We continued to deliver against our disciplined growth strategy in 2024, opening 838 new rooms and further strengthening our growth pipeline. We also disposed of two hotels representing a significant gain above the original purchase price, refinanced our debt facilities and launched our share buy back programmes which, together with our dividend, returned €75.8 million to shareholders in 2024. I would like to thank all my colleagues at our hotels and at our Central Office for their ongoing commitment and achievements.

Looking ahead, I am confident about Dalata’s prospects. We are a modern, international, outward looking, and innovative hotel company. We have a clear strategy, underpinned by our 2030 Vision, and a team of exceptional people with an unwavering focus on delivering on our ambitious growth targets.”

ENDS

About Dalata

Dalata Hotel Group plc is the UK and Ireland's largest independent four-star hotel operator, with a growing presence in Continental Europe. Established in 2007, Dalata is backed by €1.7bn in hotel assets with a portfolio of 55 hotels, primarily comprising a mix of owned and leased hotels operating through its two main brands, Clayton and Maldron hotels. Dalata is ambitious to grow its portfolio of 11,990 rooms and pipeline of 1,624 rooms further in excellent locations in select, large cities and is targeting 21,000 rooms, either operational or in development, by 2030. For the year ended 31 December 2024, Dalata reported revenue of €652.2 million, basic earnings per share of 35.5 cent and Free Cashflow per Share of 55.8 cent. Dalata is listed on the Main Market of Euronext Dublin (DHG) and the London Stock Exchange (DAL). For further information visit: www.dalatahotelgroup.com

Conference call and webcast details

The senior management team will host a conference call and webcast for institutional investors and analysts at 08:30 am (GMT) today, 6 March 2025. Please allow sufficient time for registration.

• For conference call details, please register here
• The webcast will be available here

Contacts

Note on forward-looking information

This Announcement contains forward-looking statements, which are subject to risks and uncertainties because they relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Group or the industry in which it operates, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements referred to in this paragraph speak only as at the date of this Announcement. The Group will not undertake any obligation to release publicly any revision or updates to these forward-looking statements to reflect future events, circumstances, unanticipated events, new information or otherwise except as required by law or by any appropriate regulatory authority.

2024 financial performance