Ongoing expansion helped push up first half profits at Ireland’s largest hotel group.

Dalata Hotels today reported an 8.3% rise in pre-tax profits to €35.4 million for the six months to June 30.

This came on the back of a 10.6% hike in revenue to €180.6 million year-on-year, with revenue per available room rising by 7.1% to more €89.39 on an average room rate of €108.88.

Chief executive Pat McCann said he was monitoring ongoing speculation about the possibility of a hike in the VAT rate in Ireland for hospitality services from 9% to 13.5%.

“I believe that the reduction in the VAT rate has been hugely positive for the tourism industry and has been a very significant factor in the additional 79,100 jobs created in the sector since the lower rate was introduced in July 2011,” he said.

“I also note that annual VAT income to the exchequer from the tourism industry is expected to increase from €630 million in 2012 to €1.04 billion by the end of 2018.”

The company has a pipeline of 2,800 rooms due to open by 2021, including 1,500 this year.

New hotels are planned in London, Birmingham, Manchester and Bristol in addition to openings in Belfast and Dublin and extensions to other properties in Ireland.

A new Maldron-branded hotel is due to open in Manchester, the company’s third in the city.

Dalata said: “We remain very positive about the opportunity presented by the fragmented nature of the hotel market in our target UK regional cities.

“Trading across our UK hotels has been mixed but broadly in line with our expectations given the challenging market conditions in some cities. The balance of the year should be broadly similar to performance levels in the year to date.

“As we continue to explore opportunities in the UK and Irish hotel markets, we remain very confident that we can further build an attractive pipeline of rooms.”

McCann added: ”So far in 2018, we have opened two new hotels in Dublin and Belfast representing a total investment of €50 million.

“We also completed significant redevelopment projects incorporating 233 additional bedrooms, meeting facilities and upgraded food and beverage facilities across three hotels representing a combined investment of €34.9 million.”