IRELAND’S BIGGEST HOTEL group, Dalata, plans to demolish the three-star Tara Towers Hotel it acquired last year.
The group behind the Maldron and Clayton brands in Ireland and the UK has submitted a planning application to redevelop the 1.46-acre property located in Dublin’s south, near Blackrock.
The redevelopment will see the creation of a new four-star Maldron hotel with 140 rooms, a restaurant, bar and meeting facilities. The group has also sought to develop 70 residential units on the site.
Dalata acquired the Tara Towers Hotel site at the beginning of last year in a deal worth €13.2 million.
The hotel group initially planned to splash out up to €4.5 million on a refurbishment of the existing 111-room hotel and upgrade the property to a four-star standard – while also bringing it under the Maldron banner.
However, this proposal for the 1.46-acre site has been shelved and the company has now sought to demolish the site, which is adjacent to the recently developed Elmpark Urban Campus.
According to analysts at Davy, it is expected the hotel will shut down in the first half of next year if its application is “subject to a smooth planning process”.
The analyst firm added in a briefing note this morning that it is expected there will be significant interest from development partners due to the location of the site and the residential opportunities cited in the planning application.
“In addition to a potential partner proposing to fund and build the residential component of this project, we believe other options such as completing the full project could also be proposed by developers,” analysts said.
The Dalata Hotel Group has been involved in a number of property deals in recent times as it has sought to assume a larger chunk of the Irish hotel market.
Earlier this year, the group struck a deal to buy a hotel in Portlaoise and acquire parts of two prominent Dublin hotels.
The company acquired the freehold interest of parts of the Clayton Hotel Cardiff Lane and the Clarion Hotel Liffey Valley for €62.5 million from receiver Kieran Wallace of KPMG.
Last year, Dalata deputy chief executive Stephen McNally was critical of the the Irish planning process and called the system “an absolute joke”.
He said that there are sites available for new hotels builds but “the yield on the sites is not high enough to do it”, he said.
“The number of hotels that have gone for planning and can’t get yield on the site is phenomenal … they can’t build until they get the optimal number of bedrooms on a site.”
Dalata saw its revenue soar last year as sales hit €290 million for 2016, up 29% on the same 12-month period prior. It currently owns 4,770 hotel rooms in Ireland and the UK and leases a further 2,334 rooms.
As well as the new hotels in Dublin, it will open hotels in Belfast, Cork and Newcastle, England by mid-2018.