Re: Re: Pierse Construction in Liquidation
Hotels have several profit centres, not just the rooms.
– Sleeping accom
– Meeting rooms
– Lobby cafÃ© bar
– Historic Tours within hotel (if historic — Shelbourne was involved in 1916)
– Concession / Referral income
The Shelbourne is a luxury 5 star.
Its room rates will always be at the top end of the industry average.
Its occupancy will not be as sensitive to general trading climate as lesser hotels.
Many (sufficiently well-to-do) people passing it in midday would go in for a lunch
or afternoon tea. Likewise with country visitors to Dublin.
Taking your room number of 250 and applying an avaerage of €200 to each room
over a 300 night year, you get €15 million in B&B alone.
If all the other hotel areas bring in another €20 million that gives a grand turnover of
€30 million per annum.
Would I be wrong in suggesting an operating profit margin of 75% for a five-star ?
That would give OPs of ~ €25 million for a busy Shelbourne.
Which would mean a return of ~ 9.4% on the owners €265 million investment, all
aside from the many perks, privileges and prestige of being an owner of the Shel.
The €265 million total outlay on a 20 year mortgage would mean an annual bill of
around €1.4 million — very manageable on this revenue.
At the time it was nearly a goer.
Moreover when you consider that the refurbishment costs were much more than
Of course, now, it’s not so attractive.