Dalata Hotels (DAL) 634p

Gain to date: 9.2%

Original entry point: Buy at 3 May 2018, 580.5p

We’re very confident about the outlook for Irish hotel operator Dalata Hotels (DAL) given that revenue per available room (RevPAR) in the Irish hotels industry continues to beat expectations.

Since entering our Great Ideas portfolio, shares at Dalata have jumped 9.2% to 634p.

RevPAR, a key performance measure in the hotel industry, grew by 8.4% in Dublin and 11.4% in regional Ireland in June according to data from STR.

While this is slightly slower compared to May, the strong performance is still smashing forecasts.

Davy Research analyst Joseph Quinn anticipates RevPAR growth in Dublin of 5.5% for the year and 5% growth in regional Ireland.

Quinn says Dalata should continue to outperform the market with its strategy to improve its yield using decentralised sales management.

Outside of Ireland, Dalata has delivered 1.7% RevPAR growth in London in June thanks to the first hike in occupancies year-on year since May 2017.

The hotel operator is expected to outperform its UK-quoted peer, Premier Inn owner Whitbread (WTB), with an anticipated annual 3.5% like-for-like rise in UK RevPAR according to Davy estimates. The broker only forecasts Whitbread to deliver a 0.5% increase in RevPAR over the same period.

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