“You sometimes need a crisis to confirm that your structure and strategy can survive” – Pat McCann, founder of Dalata Hotel Group

Pictured: Pat McCann, founder of Dalata Hotel Group

Pat McCann has over fifty years’ experience in the hotel business. He founded Dalata Hotel Group in 2007.

This article was originally published in the cover story of Business & Finance magazine, vol. 58, no. 1. It is available to read in our archive, here.

Dalata was born just before the financial crisis of 2008. A business like Dalata that started life in 2007 would not be seen as a prime candidate for survival during that crisis. However, not only did Dalata survive, it took full advantage of the crisis and actually came out of the crisis stronger than it went in. The way we have structured the business and particularly the balance sheet, underpinned that survival and the eventual growth story. This conservative balance sheet management is the foundation for both the success of Dalata during the good times and its survival during the COVID crisis. Unfortunately, you sometimes need a crisis to confirm that your structure and strategy can survive during the various economic cycles.

The Dalata decentralised model where we give full autonomy to our Hotel General Managers to run their hotels as if they owned them and to be profit responsible was another key factor in our survival. I am delighted that we kept all our senior teams intact at both Hotel and Central Office during 2020, it means that we do not have to rebuild our senior teams and rebuild our business at the same time. Many hotel companies in Europe simply abandoned their teams. As we recover this will prove a challenge for many hotel companies.

We are blessed in Dalata with our strong technology base. Over the past year we used those technologies to communicate and provide education for all our people that were unfortunately laid off. Our Dalata online training portal, which is part of our Dalata Academy, was the basis of intense training and development courses for all our people. From the start of the pandemic to the end of October, 54,000 courses were taken by our people. This together with the Alkimii app which each employee has allowed us to continuously engage with each person. This engagement and people development will serve us well as we emerge from the pandemic.

In Dalata, we have taken the view that 2020, 2021 and 2022 will all be very different and all our plans are structured on that basis.

The hospitality sector has been one of the hardest hit sectors during the COVID-19 crisis. As we start to plan for 2021 and beyond it gives us many challenges. The hotel business model is made up of many different market segments, be they Tour Operator, Corporate, Conferences and Events, Airline and Transient Corporate and Leisure, to name just a few. In normal years it is possible to forecast with a reasonable level of accuracy how each segment will perform. This will not be the case in 2021, and we would hope as we rebuild the business in 2021 that many of the normal patterns will re-emerge for 2022.

In Dalata, we have taken the view that 2020, 2021 and 2022 will all be very different and all our plans are structured on that basis. 2020 is all about survival. It is not about surviving and hanging on by your fingernails, it is surviving and being ready to take on opportunities brought about by the crisis. At the beginning of the pandemic, we set ourselves three tasks: To look after our people, look after our customers and business, and look after our cash. Looking back, we have done a good job on all three fronts. On the cash side we had over €300M in cash or undrawn facilities at the end of September. So, despite all the slings and arrows of outrages fortune, we in Dalata will end 2020 in a relatively strong position.

When we look forward to 2021, we are looking at it in four quarters. In quarter one, we see that as being similar to quarter four 2020. In quarter two, we see some signs of recovery emerging. This will continue to build through quarter three and quarter four. All of this is contingent on vaccines and return of international air travel.

In 2022 we see the arrival of the new normal, where by and large our business patterns will re-emerge. There will be differences but my instinct tells me people will return to relatively normal patterns of behaviour. For the workplace to be efficient and productive we will see increasing number back in the office and international business travel will have returned. The idea that we will have widespread working from home will disappear. You cannot build a company culture or mentor the next generation if everyone continues to work from home. The other thing I would say to ambitious people, if you work from home, you are out of sight and out of mind.

I am fifty years in the business and during those years, change is constant. This time is no different change will happen and smart people will take full advantage.