Hotel debt still a problem despite profit increase
on 25/07/2012 07:28:38
That's the message today in a new report on Irish hotels.
It shows 2011 profits were up 23% year on year, following four years of decline - but we're still at only 50% of profits of the peak year of 2007.
Overall, there is about €6bn of debt attached to Irish hotels and industry groups say that debt cannot be successfully serviced on current profits.
Aiden Murphy, a partner at Crowe Horwath, the company that wrote the report, says: "We have a number of institutuions whose mandate has changed from being a long-term partner of hotels to seeking early repayment of debts.
"One of those being loans acquired by NAMA and two being the decision to close down the Bank of Scotland. These events probably impacted up to 250 hotels in Ireland."