Merchant Hotel owners upbeat despite £3m annual loss
The company behind the five-star Merchant Hotel in Belfast's Cathedral Quarter has said competition is one of its biggest challenges as it recorded a £3m loss.
A company report filed by Merchant Hotel Ltd, which is led by Bill Wolsey and part of the Beannchor Group, said the loss was due to write-downs of £4m in the value of the luxury hotel, a former Ulster Bank branch in Waring Street.
The firm also said it had reached terms with Goldman Sachs, the US institution which bought its loans when they were sold by Ulster Bank last year as part of Project Nadal.
But the company said it was still happy with the results as the firm enjoyed good sales with turnover increasing by around 3% to over £11m.
"The Merchant Hotel has reported a strong trading period. However, following impairment write-downs this has reflected a loss in the accounts for the year," a statement said.
"Long-term funding has been agreed with Beltany Property Finance Limited.
"The directors remain optimistic about future trading performance."
The company said its greatest challenges came from competition from other hotels, employee retention and maintaining the hotel's reputation.
But a spokeswoman added that the company also faced competition from bars and restaurants.
Parent company Beannchor Group unveiled plans earlier this year for a second hotel at Lagan House. The 55-bedroom venue is set to open early next year.
The company's results come as Hospitality Ulster welcomed a move by the Northern Ireland Affairs Select Committee to look into the VAT rate on tourism and hospitality businesses in Northern Ireland.
The VAT rate here is 20%, compared to the Republic's 9% rate for hotel and hospitality businesses.
Colin Neill, chief executive of Hospitality Ulster, said: "The UK's VAT rate places Northern Ireland's tourism and hospitality sector at a disadvantage as we share a land border with the Republic of Ireland which has a rate of 9%."
And he said Hospitality Ulster now needed a co-ordinated effort from elected representatives to make lower VAT a reality.