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Dublin’s historic Shelbourne Hotel has reported a sharp turnaround in its financial fortunes with profits jumping to €3.4 million last year, up from a loss of €322,000 in 2015.
Recently filed accounts for Kennedy Wilson Shelbourne Operations, the firm behind the hotel, showed turnover at the 265-room property rose by 12 per cent to €39.7 million over the same period.
Directors said increased demand for the hotel’s “five-star product” linked to ongoing recovery in the wider economy had driven up room prices.
They also said they were confident that the strong trading position could be maintained over the medium to long term “as the benefits arising from the increased revenue-generating potential of the hotel and its facilities continue to be realised”.
However, the directors noted the hotel’s occupancy rates were likely to drop in the first half of 2017 as the hotel undertook a major refurbishment of its rooms and facade.
This project finished last month and the company now plans to embark on a second refurbishment project to upgrade various internal spaces, including the Lord Mayor’s Lounge, the ballroom, and several meeting rooms.
The total projected cost of the refurbishments has not been disclosed but it is expected to run to tens of millions of euro.
Midweek room rates at the hotel, acquired by US investment firm Kennedy Wilson in 2014, start from €248 a night ranging up to €5,000 for the Princess Grace presidential suite.
In the accounts, the hotel’s directors pinpointed fluctuation in demand for hotel services, which was tied to the general economic environment, as the key risk to the business.
“The company is dependent on the number of tourists visiting Dublin and the hotel industry is highly competitive, especially in a period when general economic conditions are impacting adversely the tourist, leisure and business sectors,” they said.
Irish hotel owners were among the main beneficiaries of the recent budget, with the Government deciding to maintain the reduced rate of VAT for the hospitality businesses on foot of risk to the sector from Brexit.