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not so merry Dromoland Castle and sister hotel lose €400k in cancelled Christmas parties due to Covid

Chief at hotel says cancellations have come after Covid surge and comments from Chief Medical Officer


Dromoland Castle in Co. Clare, Ireland

Dromoland Castle in Co. Clare, Ireland

Dromoland Castle in Co. Clare, Ireland

One of the country’s best known five star hotels, Dromoland Castle and a sister hotel have lost out in recent days on an estimated €400,000 in Christmas party income.

According to the Chief Financial Officer at Dromoland Castle, Joe Hughes, the Christmas party cancellations for Dromoland Castle and neighbouring The Inn at Dromoland have come due to the current surge in Covid-19 cases and comments made by Chief Medical Officer (CMO), Dr Tony Holohan this week.

Mr Hughes said on Friday: “Prior to the CMO’s comments, some companies had already cancelled their proposed gatherings but the formal announcement crystallised smaller party group cancellations within 24 hours."

He stated that “the estimated total revenue shortfall would be around €400,000 on forecast across both hotels”.

Mr Hughes said that around €250,000 of the estimated €400,000 in cancellations have been made for the two Co Clare hotels since Dr Holohan’s comments on Christmas parties earlier this week.

Mr Hughes said: "Many of our colleagues in the industry are seeing substantial levels of Christmas party cancellations in the aftermath of the CMO's announcement."

Mr Hughes confirmed that Dromoland Castle's Christmas residential package for this year is booked out.

Mr Hughes made his comments as new 2020 accounts show that the five star resort and The Inn at Dromoland last year sustained a €15.7m or 68.5pc revenue hit due to Covid-19 shutdowns.

Revenues decreased from €23m to €7.23m in 2020 and the accounts show that Dromoland Castle Holdings Ltd sustained a pre-tax loss of €3.3m due to the pandemic.

The loss takes account of non-cash deprecation costs of €2.08m and interest charges of €409,610.

The hotel firm last year received €2.29m in State Covid-19 wage subsidy scheme payments.

Revenues from rooms declined from €11.74m to €2.87m and food and drink revenues declined from €8.9m to €3m.

General Manager at Dromoland, Mark Nolan, said that the hotel “had a cliff fall off in revenues last year due to the pandemic”.

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However, Mr Nolan said that the biggest challenge for 2022 will be to manage demand.

Mr Nolan said that 2022 “looks very good - it looks too good in spots. At the moment July is at 73 per cent occupancy already. It will churn, things will come off and come on.”

On the 2021 performance at Dromoland, Mr Hughes said: “We have performed above expectations. We had initially budgeted for moving into positive Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) territory and we have more than exceeded that. Our forecast for the rest of the year is strong.”

Mr Nolan said that last year “we were looking into the abyss, but right now, the road looks a lot better than it was 18 months ago”.

Mr Nolan stated that the resort closed on March 19th 2020 due to Covid-19 and at a conference call with the hotel board a week later, the board agreed to raise fresh funds of €5.3m for the hotel through issuing shares.

Mr Nolan said: “They were over-subscribed which really made a helluva difference to us from a cash point of view.

He added: “It hugely strengthened our balance sheet and we were very strongly positioned coming into the year with an extra €3m in cash.”

He said: “Whatever blips there were this year, we were in a good position to see them out.”

The €5.3m cash injection also allowed Dromoland to spend €1.2m in capital expenditure during the pandemic.

At the end of December last, the company had shareholder funds of €19.8m.

Numbers employed last year reduced from 401 to 179 and staff costs reduced from €9.66m to €5.6m.

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