Expressing his initial disapproval, Richard Crowley referred to the move as “extraordinary” and “making no sense”. However, he later toned down his criticism during the analyst call discussing the company’s first-half results.
This incident highlights the discrepancy between public conversations about hotels and the focus of investors.
Analysts predict that Dalata shares, currently trading at about €4, will rise to €6.
The public has been outraged by reports of Dublin hotels charging exorbitant prices, especially during major events like Taylor Swift concerts. These accusations of price-gouging are expected to influence the Government’s decision regarding the VAT rate for the sector.
However, during the earnings call, Richard Crowley’s criticism was the most passionate moment. He highlighted the uncertain impact of a potential VAT increase on hotel room prices and customer willingness to pay the difference.
Nevertheless, analysts believe the additional 4.5% VAT will not significantly affect Dalata’s business. Instead, they are more interested in the company’s growth, especially as it expands its operations in the UK.
Dalata, the largest hotel operator in Ireland and the UK, reported revenues of €284.4m for the first half of the year, representing a significant increase from the previous year. Additionally, their RevPAR (revenue per available room) rose by 23%.
Though Dalata’s stock performance has been lackluster in recent years, it has seen some improvement and is now being recommended as a “buy” by analysts. The company’s robust balance sheet allows for potential property investments amounting to €750m in the “medium term”.
While London is a target for Dalata, other cities in the UK also hold strong potential for growth. In particular, regional cities like Birmingham and Glasgow are seen as attractive opportunities for expansion. Dalata has also ventured into continental Europe with a hotel lease in Düsseldorf, but the UK remains the company’s primary focus.
Davy stockbrokers and German analysts Berenberg have both rated Dalata as a “buy” with price targets of €6.25 and €6 respectively. Although these levels would not surpass the stock’s all-time high in July 2018, they would bring it closer to the values seen in the first half of that year.
Denial of responsibility! VigourTimes is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
