Dalata Hotel Group PLC on Wednesday announced a lower profit as increasing costs outpaced revenue growth, as it noted strong demand from corporate and international visitors.

The Dublin-based hotel chain which operates the Maldron and Clayton hotels said half-year pretax profit fell 17% to €41.9 million in the first half of 2024 from €50.4 million a year prior.

Revenue rose 6.1% to €302.3 million from €284.8 million, while revenue per available room was €110.77, up 1.2% from €109.41.

Hotel occupancy dipped slightly to 77.6% from 78.4% year-on-year, while average room rate rose by 2.3% to €142.67 from €139.50.

Cost of sales increased 11% to €111.3 million from €100.3 million, while administrative expenses came in 10% higher, at €122.2 million from €110.7 million.

Net finance costs increased 15% to €27.7 million from €24.1 million.

The firm announced an interim dividend of 4.1 euro cents per share, up 2.5% from 4.0c a year ago.

Dalata announced a share buyback programme of up to €30 million, set to start in the coming days. The purpose of the buyback is to reduce the share capital of the company.

According to Dalata, demand from corporate and international visitors remained strong, but there has been a softening from more cost conscious domestic customers, with trade lower than expected in regional Ireland and in the UK in July and August.

Looking ahead, Chief Executive Officer Dermot Crowley said: ‘As I look ahead, I remain very confident on Dalata’s future growth prospects as we continue to deliver on our stated growth strategy, becoming a key four-star market player in targeted locations. While the quantum and timing of hotel investments vary from year to year, I am excited by the opportunities we are currently considering.

‘Our ambition is to announce over 6,500 additional rooms over the medium-term across all of our markets as we look to continue to grow in Regional UK, expand our presence in London and the large European cities and maintain our market share in Ireland. Dalata’s strong financial position and our experienced team ensures we are well positioned to continue to deliver sustainable growth and returns for our shareholders.’

Shares in Dalata were up 4.0% to 392.00 pence each in London on Wednesday.

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