ENTREPRENEUR
PROFILE

Pat McCann

Dalata Hotel Group plc

Business Purpose

Owning, leasing and managing hotels in Ireland and the UK.

 

Personal Bio

Born in County Sligo, Ireland, Pat McCann started his career in the hotel business in 1969 with Ryan Hotels plc, moving on to Jurys Hotel Group plc in 1989.  He became Chief Executive of Dalata Hotel Group in late 2007 and currently serves as Non-Executive Director of Quinn International Property Management Limited and as the Chairman of Euro Care Healthcare Limited.  A former Non-Executive Director of Greencore plc, EBS Building Society and Irish Heart Foundation., Pat also served as National President of the Irish Hotels Federation, and was a Member of the National Executive Council of IBEC. Dalata Hotel Group plc, which comprises Maldron Hotels and Partner Hotels, operates 39 properties in Ireland and the UK, with circa 6000 rooms and almost 4000 employees.  The Company has ambitious development plans and will expand its Irish and UK operations.  The Company floated on the Dublin and London Stock Exchanges on 19 March 2014, raising €265m.

 

Company Profile

Formed in 2007 with the purchase of eleven leasehold hotels in Ireland.  Central Office based in Dublin.  Grew to become the largest hotel operator in Ireland with circa 6000 bedrooms and almost 4000 employees.  Operations throughout Ireland and in Cardiff, Wales.  Dalata now has 10% of the market; nearest competitor has 3%.  Survived a 40% decline in revenues from peak in 2007 to 2010.  Rapid recovery from 2011 with strong growth in turnover, profits and employment levels.  In 2014 the Company raised €265m in an IPO and is now listed on the Dublin and London Stock Exchanges.  Wide range of customers in both corporate and leisure markets.  Focus to date has been on leased and managed hotels which will continue with a new focus on owned hotels.

 

– ENTREPRENEURIAL INSIGHTS –

What vision/lightbulb moment prompted you to start-up in business

No lightbulb moment, I was simply approached by a group of investors to start a new hotel company.  This was in 2007 when I was looking at new opportunities.  I had a vision to build a base business in Ireland and expand into the UK.  There was talk of a “credit crunch” and “soft landings”.  Little did I know what lay ahead in 2008/2009!

 

How did you secure your first investment?

People invest in people.  The success in Jurys was extremely helpful and made it much easier to attract funds.  Rory Quirke and Gavin Bourke from TVC Holdings plc approached me with the idea of building an hotel group in Ireland and the UK.  David Goddard from Davy Private Clients joined the fray pretty quickly.  We all got on very well and it proved to be a very good partnership.

 

What was your “back-to-the-wall” moment and how did you overcome it?

In 2009 everything was collapsing around us, we had to continually forecast revenue downwards.  We could have collapsed as an organisation in that year.  When you are in that position communication is critical.  We stayed close to all our stakeholders.  We worked very closely with our bank (Ulster Bank) all our people and our suppliers.  Wage cuts were the norm as we re-engineered our cost base.  During all of the turmoil we never missed an interest or capital payment.

 

What moment/deal would you cite as the “game changer” or turning point for the company?

In 2009 we were approached by a number of banks and receivers to help manage hotels that were going into receivership.  While this was a temporary situation it was very helpful to our survival strategy.  Acquiring the leasehold on the Ballsbridge Hotel and Clyde Court Hotel in 2011 which was a much larger contract that normal was very beneficial.

 

Were there any interesting or unusual circumstances surrounding the inception of the company or its evolution?

The Company was formed just at the end of the biggest boom Ireland had ever seen.  We had to adjust our thinking away from revenue growth to a collapse of revenues and an unsustainable cost structure.  The fact that a number of key members of the team from Jurys had joined Dalata at an early stage proved very beneficial.

 

What are the biggest challenges you face now?

Dalata has experienced a number of challenges in its short life.  Having overcome these challenges the Company is now in a strong position to move into an accelerated growth phase.  Our extremely successful IPO which raised €265m in March of this year is a great achievement for the business.  However, we need to spend this money wisely and not jump on “every log in the river”.  We have huge ambition for the business and intend to reward all our stakeholders.

 

What is your biggest business achievement to date?

In the first instance, getting the business off the ground in 2007.  Secondly, getting some key people to join me in Dalata which made a major difference to our approach and strategy for survival during the worst year in 2009 and to achieving growth in the business every year since then.  The biggest achievement overall has been the flotation of the Company in March 2014; we were a €40m company that raised €265m in an industry on its knees.

 

What were the best & the worst pieces of advice you received when starting out?

Maybe it’s me but I got very little either good or bad advice.  I utilise people I know and my own team.  I tend to have strong views and this does not encourage people to give advice which is a problem.  I need to be more open and receptive to others.  My own team know me well and have devised ways of getting around my non-listening mode!

 

What top tips would you give entrepreneurs starting out today?

It can be a lonely place.  The media only report the success stories.  Remain absolutely focused on your goal.  Bring in people with different strengths to yourself.  No matter how good the idea or project there is never a guarantee of success.  The other thing to remember is that success is rarely a smooth path.  It is your ability to get over the “bumps in the road” that will build your character.  I always tell our team here that we should not worry about the competition… just make sure the competition is worrying about us!

 

Were there any early signs that you would eventually follow an entrepreneurial path?

I told my Mother when I was 10 or 11 years old that I would be rough and tough until I got to the top!  I have never considered myself an entrepreneur I am just someone who builds business with the help of a lot of people.  Even though my background is a small farming community in south Sligo I believe I have always been drawn to business.

 

Has anyone acted as a mentor to you?

Nobody in particular, I am a people watcher and look at what others do – good and bad.  I compare managing a business to running a football team.  In some teams you can have a lot of “stars” but no team.  Business is the same, you need a team that will work together for success.

 

Has your “Irish-ness” contributed to your success?

Absolutely, particularly in overseas markets.  It gives you great access.  In Ireland we fail to see how good we can be across a wide range of activities.  I find it refreshing when I travel overseas to note the very positive response I receive from all those I meet.  People from outside Ireland tend to have a much more positive view of us that we do ourselves.

 

How do you generate new ideas to stay ahead of the curve?

That is always a difficulty one in a rapidly changing marketplace.  Give people the freedom to fail.  Get people to take ownership of their part of the business.  Our General Managers behave as if they own the business.  Encourage people to look, learn and share new ideas.  Technology is playing a major part in changing our business and our distribution models are changing every day.  We have to stay at the forefront of that or we die.

 

When making a new hire, what key characteristics do you look for?

It is very simple, a nice person. We are a people business, if someone is focused on themselves they are not for us.  I look for people that will fit our organisation, but not clones as we are all different.  I love seeing how well our team members get on with each other.  While work is a serious business you need to be able to laugh at times…and sometimes that’s at yourself!

 

Have you started to feel the effects of the economic upturn within your sector/industry?

We started to see growth in 2010 which has become stronger each year since.  The problem for the hotel sector is that the growth is not evenly spread around the country.  We still have an oversupply of bedrooms in certain parts of Ireland but that issue will resolve itself.  Government initiatives have greatly helped the recovery of our industry.  The VAT reduction, airport travel tax and PRSI reductions have been of great assistance.  Events such as The Gathering are also very helpful.  In addition, the Celtic Tiger years provided great capital projects, e.g. the Convention Centre and O2 in Dublin, and a superb motorway system around the country.

 

What do you believe it takes to be a successful entrepreneur?

No entrepreneur ever feels success there is so much more to do.  You need absolute determination and a good team around you.  You need to be a good decision maker and motivator.  Sometimes over analysis will kill you, waiting for the perfect answers that may never come.  Entrepreneurs tend to lack discipline, that’s the nature of the beast, so make absolutely sure you have people supporting you who will keep you organised.

 

If you were to invest in a sector, what would you consider the next “big thing”?

That’s a difficult one.  I’d say invest in people rather than sectors.  Everyone looks at IT as the driver of the next big thing but we need to look beyond that.  As the various economies emerge from the downturn opportunities will begin to appear and not just in IT.  Avoid the herd instinct of piling into something as everyone will bail out as quickly, and try to understand the business you invest it.

 

What do you believe is your company’s competitive advantage?

Very simple, our people.  There is probably no such thing as complete competitive advantage.  What we try to do is compete in areas where we know we are stronger.  The size and strength of our organisation is key.  Our tenacity and determination to never give-up is another.  However, the over-riding factor in our competitive advantage is our people.  Without these colleagues we have nothing.

 

What sacrifices have you had to make to get your business where it is today?

I have made very few sacrifices, it’s the people close to me that have had to make the sacrifices.  In business you always struggle to get the balance reasonably right.  My difficulty is that my work has been so enjoyable it has become my hobby which is not a great situation.

 

How do you recharge your batteries?

I’m a man of simple needs – peace, quiet and fresh air.  I am into sport as a spectator – rugby (Leinster); GAA (Sligo and, believe it or not, also Mayo); soccer (Sligo Rovers and Arsenal) all torture me in some form or other!

 

Year: 2014
Category: Industry
Sector: Hospitality