<p class="section-heading" id="el-3-0">CHIEF EXECUTIVE’S REVIEW</p>
<p class="special-heading" id="el-3-1">The journey to <br>our <em>2030 Vision</em></p>
<p class="intro" id="el-3-2">We launched our 2030 Vision at our Capital Markets Day in October. We have clearly set out that we aim to have 21,000 rooms either open or under construction by 2030. We are already the largest 4-star operator in Ireland, and we are on the way to becoming the leading 4-star operator in our target Regional UK cities. We are targeting a significant increase in the number of hotels that we operate in London and other major European cities. </p>
<p class="intro" id="el-3-3">To achieve our 2030 Vision, we need to ensure that we are meeting the needs of our stakeholders as set out below. I am very excited about the years ahead as we realise our ambition to grow our presence significantly across Ireland, the UK and Europe. </p>
<p class="heading-1" id="el-3-4"><strong>Our Shareholders</strong></p>
<p class="normal" id="el-3-5">Group RevPAR only grew by 1% for the year which was marginally ahead of the market performance. Our biggest cost is payroll and the average increase in pay rates was 8%. It is always challenging when the rate by which costs are growing is significantly higher than the rate in which revenues are growing. In that context, I am very pleased with how we mitigated the impact on our ‘like-for-like’ Hotel EBITDAR margin (<a href="#glossary">see glossary</a>) which only fell from 42.3% to 40.9%. Our focus on innovation ensured that we achieved increases in productivity throughout the business. This focus and the addition of new hotels contributed to an increase in Adjusted EBITDA (<a href="#supplementary-financial-information">APM ii</a>) from €223.1 million in 2023 to €234.5 million in 2024.</p>
<p class="normal" id="el-3-6">In 2023, we recommenced the payment of dividends. In 2024, we decided that it was appropriate to both pay dividends and also carry out two share buyback programmes totalling €55 million which facilitated the repurchase of 6% of our shares. We used the net proceeds from the disposal of our two Wexford hotels to fund the €25 million buyback. </p>
<p class="normal" id="el-3-7">We will continue to look at all options open to us to enhance shareholder value. </p>
<p class="heading-1" id="el-3-8"><strong>Our Customers</strong></p>
<p class="normal" id="el-3-9">Over the last three years, we have significantly increased our investment in customer and consumer research. The results of this research have deepened our understanding of what our customers and guests expect from a hotel stay and specifically what they expect us to deliver at our hotels. Based on this research, we refreshed and repositioned our Dalata, Clayton, and Maldron brands. New creative campaigns were launched for both consumer brands, and we educated our teams on the positioning of the brands through our ‘Heart of Hospitality’ training programme.</p>
<p class="normal" id="el-3-10">We have made a strategic shift to a data-driven, technology-powered approach to marketing within Dalata, resulting in streamlined processes, enhanced online visibility, and measurable growth. We have consolidated our social media efforts, with all content planned and managed by one centralised team, allowing for premium, consistent brand messaging. We launched our refreshed websites to support the repositioned brands.</p>
<p class="normal" id="el-3-11">We are only at the start of our branding journey, and I am excited about the potential of the Maldron and Clayton brands to add shareholder value, where guests stay in our hotels not just because of their locations and physical appearance but also because they feel connected to Maldron or Clayton.</p>
<p class="heading-1" id="el-3-12"><strong>Our People</strong></p>
<p class="normal" id="el-3-13">I have said on many occasions that hospitality is all about people, and we have great people at Dalata. We have continued to be very focused on our people strategy, which supports the operation of our existing hotels as well as providing the talent for our future growth.</p>
<p class="normal" id="el-3-14">We remain committed to training and development and providing career paths for our employees. There were over 580 internal promotions during 2024, and 675 people participated in our Dalata Academy development courses run during the year. This focus on development enabled us to open four new hotels in the UK during the year, with a significant percentage of the management positions filled by internal applicants.</p>
<p class="normal" id="el-3-15">We launched our Female Employee Resource Group, which has been tasked with identifying, understanding, and removing barriers to females progressing within the organisation. Our people are our greatest asset and will continue to provide us with a competitive advantage. The focus on people will remain top of my agenda as CEO for the coming years.</p>
<p class="heading-1" id="el-3-16"><strong>Our Environment</strong></p>
<p class="normal" id="el-3-17">We have begun work on our Net-Zero Transition Plan, which we plan to publish in next year’s Annual Report. While the Net-Zero Transition plan is in development, we are continuing to decarbonise with strategic actions to influence the plan. We remain focused on reducing both the embodied carbon and operational carbon emissions when designing new hotels. Our new hotels currently under construction in Dublin and Edinburgh have been designed to operate with zero onsite carbon. We continue to reduce our carbon emissions per room sold, achieving a reduction of 31% in 2024 versus 2019. </p>
<p class="normal" id="el-3-18">All our hotels achieved gold standard from Green Tourism in 2024. We launched a water stewardship programme and also increased our focus on reducing waste at our hotels. Our focus on sustainability is not only beneficial to the environment but also helps us reduce operational costs.</p>
<p class="heading-1" id="el-3-19"><strong>Innovation</strong></p>
<p class="normal" id="el-3-20">I am encouraged that a culture of innovation has taken hold throughout the Group. We made great progress in 2024, but there is still so much to do. In an industry where pay rates are rising faster than revenues, we simply cannot afford to sit back. We must always be looking for smarter ways to do things. The innovation focus expanded in 2024 to explore ways in which we can use technology to increase revenues.</p>
<p class="normal" id="el-3-21">The projects rolled out in 2023 continued to have a very strong impact in 2024. In 2024 we reduced the hours worked in our accommodation and F&amp;B departments by 7% in the Irish portfolio on a ‘like-for-like’ basis, versus 2023. </p>
<p class="normal" id="el-3-22">In 2024, we launched a new multilingual online training platform, with the multilingual feature enabling our training to be more inclusive and effective. The rollout of our new Revenue Management System (Duetto) has just begun and has significant potential for us as a business.</p>
<p class="normal" id="el-3-23">In 2025, we have already started rolling out a number of new systems, including a CRM system to better manage our corporate sales process, a customer experience platform to better understand the profile and behaviour of our customers, and a new recruitment system with exciting potential to improve both the success rates and cost of our overall recruitment process.</p>
<p class="normal" id="el-3-24">We have continued to deliver productivity gains through our focus on innovation without negatively impacting employee engagement or customer satisfaction. There have been a range of other smaller initiatives throughout the hotels and Central Office in our goal of working smarter. The focus on innovation will be as strong as ever in 2025.</p>
<p class="heading-1" id="el-3-25"><strong>Growth</strong></p>
<p class="normal" id="el-3-26">We have almost doubled the number of hotels we operate in the UK from 12 in mid-2021 to 22 by the end of 2024. We opened new Maldron hotels in Manchester, Liverpool, Brighton, and London in 2024, all of which are performing strongly.</p>
<p class="normal" id="el-3-27">The current pipeline is robust, with our hotels in Edinburgh and Dublin currently under construction. We await clearance from the CCPC in Ireland on the purchase of the Radisson Blu Hotel Dublin Airport. I am very excited about the prospect of acquiring this hotel which has great potential.</p>
<p class="normal" id="el-3-28">We also announced in 2024 that we had entered an agreement to lease another 154-room hotel in the city of London, increasing our presence in that part of the city to four hotels containing 612 rooms. Today, we are announcing that we have entered into an agreement to lease a new 256 room Clayton hotel in Edinburgh.</p>
<p class="heading-1" id="el-3-29"><strong>Conclusion</strong></p>
<p class="normal" id="el-3-30">2024 was another year of growth for Dalata, with increased revenues, increased EBITDA, and an increased number of rooms. We remain focused on creating and developing great teams around the Group, which gives us a powerful platform to support further growth. I am excited about the potential of our brands – we are more focused than ever on understanding and meeting the needs of our guests. Our focus on innovation and further investment in technology will enable us to further grow the earnings of our existing hotels and secure new, exciting hotels in our target markets.</p>
<p class="normal" id="el-3-31">We continue to engage with and listen to our shareholders and are focused on enhancing shareholder value. As CEO, I look forward to the future with optimism and thank all our stakeholders for their ongoing support. I hope that you find our Annual Report interesting and informative. </p>
<p class="normal" id="el-3-32"><strong>Dermot Crowley</strong></p>
<p class="normal" id="el-3-33">Chief Executive</p>
