The five-star Shelburne Hotel in Dublin last year generated €30m in revenue due to the impact of Covid-19.
That’s according to new calculations showing that pre-tax losses at the Shelbourne hotel company, KW Shelbourne Ops Ltd increased last year more than 12-fold to €8.52 million on the back of lower revenue.
Underlining the particularly severe impact of Covid-19 on the hotel sector in downtown Dublin, revenue at Shelbourne last year fell by €29.48 million, or 71%, from €42.05 million to €12.2 million.
Managers said the lower turnover was a result of the shutdowns and restrictions imposed by the government in response to the Covid-19 pandemic.
They said that since the hotel reopened in June this year after another government imposed the closure, « domestic trade has been strong and international guests have started to return. »
They added that they remain confident that « the company will return to a strong mall with international guests returning to pre-pandemic levels and jobs can return to full attendance. »
Board members said that during 2020, fixed and variable costs were reduced across all hotel operating lines.
« During all of the closures, maintenance and other essential work that would normally be difficult to achieve under normal trading conditions was carried out, » they said.
Accounts reveal that the hotel’s owner, the connected KW entity, KW Irish Real Estate VII has been granted a lease concession to waive a portion of the rent payments agreed in the August 2019 rent review in light of the government’s closure of the hotel due to Covid-19.
Last year, there was zero cost under short-term leases compared to €3.6 million in 2019.
The impact of the lease concession on the right to use the assets of KW Shelbourne Ops Ltd resulted in a non-cash reduction of €26.15 million.
The company’s loss last year takes into account non-cash depreciation costs of €4.94 million.
Last year, KW Shelbourne Ops reported an operating loss of €8.13 million, and interest charges of €391,486 resulted in a pre-tax loss of €8.52 million.
In 2014, US real estate specialist Kennedy Wilson took control of the hotel when he paid 110 million euros in debts related to the property.
Staff costs to operate the hotel are borne by a separate company, Torriam Hotel Operating Company Ltd, which has a contract to run the hotel until 2026.
At the end of last December, KW Shelbourne Ops Ltd had accumulated earnings of €2.87 million.
The company’s cash discoveries were reduced from 9.66 million euros to 6.4 million euros.
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