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Making plans in the hope of better times
10 January 2010
Best Western Aisling Hotel
For Alan Moody, general manager at Dublin’s Best Western Aisling Hotel, 2009 was a successful year, with the completion of a €20 million refurbishment of the Parkgate Street property. But it was also a stressful and financially worrisome time.
‘‘Last year was a good year, but a very tough one. It was good in that we re-opened with 125 additional bedrooms, attained four-star status for the hotel and also won a Best Western International award for excellence and quality. But, on the other hand, it was a very difficult year for the industry and a very tough one financially," he said.
‘‘There is huge pressure on roomrates, and that is reflected throughout the entire industry. Consumers are looking for value and don’t have a lot of money to spend."
Moody said the hotel’s management worked hard to control costs throughout 2009.
The business employs 90 people, but employees’ working hours had to be reduced midseason.
‘‘We have to be as efficient as possible, and yet at the same time keep as many people employed as possible," he said.
The redevelopment of the hotel involved turning a 150bedroom, four-storey building into a 225-bedroom, eight-storey property. Moody operated the hotel with a capacity of just 60 rooms until the refurbishment works were complete last June; the revamped hotel now includes a double height reception lobby, a bar, a 180-seater restaurant, and bar and conferencing rooms.
Occupancy levels varied throughout the year, but on average, were more than 80 per cent. ‘‘Our ground floor restaurant and bar trade was very strong, as was our meeting room business. There’s been a lot of interest in our new look," he said.
The Aisling’s redevelopment has been complemented by improved infrastructure in the local area. The Luas, which runs in front of the hotel, has been extended as far as the O2 this year, a fact which should boost business among concert-goers.
Moody said other infrastructure and tourist attractions, such as the Guinness Brewery and the Phoenix Park, also garnered a lot of tourism business for the hotel. ‘‘Infrastructural developments are just simple ways of helping businesses. I think it will really be an advantage to us this year," he said.
He said energy costs were a big worry going forward, and that hadn’t been helped by the carbon tax introduced in last December’s budget. But he did welcome the reduction in Vat and excise duty, and said it would help to drive continued growth in the hotel’s restaurant and bar business.
‘‘It will make it more affordable for people to eat out," he said.
Although the impetus for revamping the hotel came during the height of the boom, Moody insisted that the owners never doubted the renovation during the recession.
‘‘There has been a hotel on this site for at least 100 years," he said. ‘‘As a hotelier, I’ve experienced recessions in the past, but I have no doubt the hotel would survive."
Moody is anticipating an increase in occupancy levels in 2010, but predicted that the average room rate will be lower.
‘‘We will find away through it," he said.
‘‘We want to focus on trading next year, and we’ll be working hard on our sales and marketing. Because we’ve now upgraded and redeveloped, we’re in a very good position for 2010. Clearly, there are too many hotels in the marketplace, and that will continue to put undue pressure on the industry.
But we’ve coped, we’ve survived, and we look forward to 2010 with a degree of enthusiasm. There’s no other way."
Michelle Devane
Red & Grey Design
A year ago, Red & Grey Design, the visual communications company that designs the brochures and website for the Dublin Film Festival, was looking forward to a reasonably solid business year in 2009.Thesmall firm, in business for seven years at the time, was confident of retaining its clients.
As 2010 approaches, one of the firm’s directors, Richard Weld-Moore, said the year had gone ‘‘more or less as expected’’.
‘‘We had no great plans to expand, so we’re still where we were," he said. ‘‘We’ve been very busy - last year I started redesigning our website, and I still haven’t had time to finish it."
The company acquired several new clients during the year, including the Wexford Opera Festival and the Irish Museum of Modern Art.
In the year that Twitter and Facebook went mainstream, many clients had started using their websites more as a communication tool, Weld-Moore noted, rather than as a pure brochure. But, broadly, budgets were tight.
‘‘We did have plenty of clients coming back to us to say right, we still want this work done but we’ve now only got half, or two thirds, of the budget," he said. ‘‘So we had to go to our suppliers and see what they could do. We’ve needed to be very creative within the constraints we had."
Red &Grey is starting work once again for the 2010 Dublin Film Festival.
Weld-Moore said he expected the first six months of 2010 to be even tougher than 2009. ‘‘I think people will have smaller budgets once again," he said. ‘‘But we’re not going away any time soon."
Red & Grey was founded out of a friendship between three graduates of the National College of Art and Design:
Weld Moore, Bob Gray and Keith McGuinness. They work as a team, occasionally taking on freelancers.
Catherine O’Mahony
Shenanigans Bar and Restaurant
The first year in businesses for the revamped Shenanigans in Sligo was not an easy one. However, owners Seán and Trish Cunningham are delighted that they managed to make a profit for 2009.
‘‘The fact that we had a profitable year was a big bonus for us," said Seán Cunningham.
But the couple have a lot of outgoings and loans, as they spent 15 months and €3.5 million refurbishing and extending their old student pub before opening the new restaurant, bar and nightclub in September 2008.
Seán is focusing on the positives, however, and said that last year’s profit, coupled with the fact that the premises was in line for the title of the first carbon neutral pub in Ireland, would ‘‘all help the bottom line’’.
The ‘green’ pub has solar panels and a rainwater harvesting system, which gathers rainwater on the roof that supplies the needs of the whole building, except for drinking water. When interviewed last year, Cunningham employed 47 staff, 25 of whom were fulltime.
He has since reduced his staff to 32, with 20 full-time.
‘‘We just had to pare things down and be as cost-effective as possible," he said.
‘‘The staff that we have are willing to do more, and are multi-tasking. I think in this environment, it’s very important to have staff that are flexible.
There is also less conflict with staff, as everyone is working together to make the business successful , so that ultimately they can hold on to their jobs."
Sligo itself has experienced a number of job setbacks recently.
In November, Abbot Ireland, which has had a plant in Sligo since 1974 and with 360 staff is one of the county’s biggest employers, announced that it would be seeking 41 voluntary redundancies.
The news came 24 hours after it was confirmed that Stiefel Laboratories is to close by 2013 with the loss of 250 jobs.
‘‘This has had a huge impact on the pub and restaurant trade, as those people who lost their jobs were the ones who used to frequent the town’s bars and restaurants," said Cunningham.
‘‘The overall impact for Sligo is that people aren’t out spending. The town is very quiet at night-time, and during the day there are less people shopping. November was a very bad time in the town. We were lucky because there were lots of college graduations, so we got business from that."
However, he said the bar was being hit by a decrease in business from its student base.
‘‘They are drinking a lot more at home and coming out later in the night, and they are also spending less when they come out. The food trade has been hit hard too, with a lot of people just having pizzas at home and then going out," he said.
Cunningham said he was positive for 2010, but was worried about the new year. ‘‘If January and February are as bad as everyone is saying they are going to be, then it’s going to be a tough start to the year. But we are going to remain positive, and hope that we will be in a position to return a profit again next year."
Martha Kearns
Nando’s
Expansion plans for the Nando’s chicken restaurant chain in Ireland did not progress as much as planned in 2009, but four new outlets are set to launch this year.
Nando’s opened in the Victoria Square shopping centre in Belfast last March and at the Dundrum Town Centre in Dublin last September. Alan Syman, the company’s managing director and a partner in the business, had hoped to open further two restaurants in 2009 - in Cork and Dublin city centres.
However the economic downturn and a change of mind about the prospective locations meant the openings will happen this year instead.
The Afro-Portuguese chain is already well established in Britain, where over 200 branches have been opened in the past 15 years. The Irish market is now a key target for the company, and they are actively looking at further opportunities in Galway, Waterford and Limerick.
Nando’s will open its second Belfast restaurant on Bedford Street on January 20, and will move into a unit in the Swords Pavilions shopping centre next May. The latter will be located below the cinema in the centre, and will have seating for 96 people.
The first Nando’s in Cork will open in the Mahon Point shopping centre at the end of July, with capacity for 120 people. A third Dublin outlet will open on Mary Street in September and will have space to seat 80.
Nando’s unique selling point is its use of peri-peri - a spice discovered by Portuguese explorers in Mozambique and used in cooking by Africans and Portuguese - and the 24hour marinating of the fresh chicken which it serves. The menu also includes burgers, pittas and vegetarian options.
Syman said that the middle of 2009 was a tough time for fledging outlets in Ireland, but that the lead-in to Christmas had been promising.
‘‘I am not sure if the spend is improving or whether it was just a festive spike," he said.
‘‘The new Hamley’s toy store that opened near us in Dundrum last year also helped increase footfall."
While Syman said that, overall, the company’s experience to date in Ireland had been a very good one, he believes that retail rents need to come down further. ‘‘Some landlords are still trying to command premium rents, instead of reflecting a new reality around rent prices," he said.
Nando’s outlets in Ireland each employ between 30 and 4 0 people, so Syman expects that at least 120 more jobs will be created by the company this year.
‘‘I’m excited about our new openings in 2010," he said. ‘‘We are also looking at the potential on the high streets and shopping centres in Galway, Limerick and Waterford. The benefit of a shopping centre location is that people will come there, regardless of the weather."
Nicola Cooke
FLI Environmental
The credit crunch had a far greater impact on the performance of FLI Environmental last year than anticipated, according to the firm’s managing director Michael Flynn.
Based in Carriganard in Waterford, FLI provides environmental services in areas such as contaminated land remediation, biomass energy, waste water treatment and geosynthetic lining.
‘‘Last year was a very tough year and a very competitive year," said Flynn.
‘‘The credit crunch had a serious impact on our business - it resulted in a number of our clients having to shelve projects because they couldn’t get funding for them. At the end of 2008,we felt we were in a good position to weather the storm, but we hadn’t anticipated just how much the issue of funding was going to impact on our clients."
As a result, Flynn had to lay off staff during the year. ‘‘We could see the way things were going, and we simply had to do it. We had no choice," said Flynn, who this time last year had 200 staff.
Flynn, who has customers in overseas markets such as Britain and France, as well as in Ireland, is anticipating another difficult year in 2010.
‘‘We can see a bit of life returning to Britain and French markets, and would expect to see something of a recovery there this year," he said. ‘‘But I can’t see Ireland returning to any kind of normality until 2011. The larger economies in Europe are turning around much faster than we are."
He described the December budget as a step in the right direction.
‘‘The budget really needed to send out a signal to international markets that we are heading in the right direction, and I think it did that," he said.
Gillian Nelis
Harmonics
Not too many Irish companies can hope for turnover growth this year, but if one of the main parts of your business involves helping people through the redundancy process, you are definitely operating in a growth sector.
Revenues at career and coaching firm Harmonics rose by 11 per cent last year, following on from a 35 per cent increase in 2008.
Managing director John Fitzgerald said that it wasn’t all plain sailing, however, and some sections of the business performed better than others.
Nevertheless, Harmonics is facing into 2010 with a healthy amount of new business.
Outplacement consultancy - where Harmonics is brought into a company making redundancies to help the staff being let go kick start their careers again - continues to be one of the most active parts of the business, trebling over the course of the past year because of the sheer number of redundancy programmes now being implement.
But this upsurge in business coincided with an increase in competition.
‘‘What we found was that a lot of recruiters were chasing into that space and offering a cheap and cheerful service.
That impacted on our margins, but we focus more on the managers and professionals," said Fitzgerald.
The company tends to work with people over the course of three or four months, rather than just offer one-day workshops, he added. Among the new business added this year were a number of high-profile clients, such as Tyco and Superquinn.
Despite the bleak economic outlook and rising dole queues, Fitzgerald said that many of those who went through outplacement courses were having success. In some cases, they have made a sweeping change and moved from one sector to another, with areas like green energy and biotechnology still growing, in addition to a rising number of smaller start-ups looking for experienced people.
‘‘It is like the Premier League - the top teams will always be up there," he said. ‘‘If you are competing at the Premier League level, you are going to be a wanted person. Show me a company that doesn’t want a good salesperson at the moment."
One of the highlights of the year for Harmonics was Fitzgerald’s appearance in a forthcoming RTE documentary series called Rising Through Redundancy. During the series, he works with six people who have lost their jobs. ‘‘I started working with them in August and I finish in January.
The series will be broadcast in February," he said.
While the outplacement side of the business has performed strongly in the past year, one section that didn’t do as well was the leadership and coaching section. Investment in this sector all but dried up during 2009, as companies took a hatchet to their costs.
‘‘Having said that, the order book for 2010 is full. People have taken out the costs, they have let people go, but the leaders are left behind and they are asking themselves how they can bring themselves and their companies on," Fitzgerald said.
Surprisingly, the company’s recruitment business has also performed strongly, mainly because of its focus on the resilient life sciences sector. ‘‘That division has been up 10 per cent, if you can believe it. We have developed a good relationship with clients in that space, and we are looking to add to that team in 2010," he said.
Dick O’Brien
Postbank
Margaret Sweeney believes she is one of only a handful of chief executives able to say that the company they head has grown both its customer base and turnover in the past year.
As head of Postbank, former Aer Rianta chief executive Sweeney presides over a banking operation with more than 200,000 customers. A year ago,
the bank had 130,000 customers and was opening 400 new accounts each day. ‘‘This has slowed a bit as the bank matures, but we are still adding about 300 accounts a day," she said.
The financial services firm was set up as a joint venture between An Post and Fortis in early 2007. In October 2008, the French bank BNP Paribas took control of Fortis’s operations, including its stake in Postbank.
‘‘Last year definitely brought more challenges - or at least different challenges to 2008," Sweeney said.
The restructuring of Fortis meant that Postbank had to push back its plan to introduce a personal loan product in 2009, but Sweeney is adamant that this remains a top priority for 2010. ‘‘We need to be getting credit out there as soon as possible.
It is important for growing the business and if we had it, we’d have a full service offering," she said.
Given that the bank started from scratch in 2007, its array of products is already quite substantial and includes a current account with an overdraft facility, three savings accounts, a credit card and a range of general insurance and life assurance products.
‘‘We launched the insurance products in post offices this year and also launched a term savings product," said Sweeney, who added that the market had ‘‘fundamentally changed’’ over the past 12 months.
‘‘This shift has been reflected in consumer behaviour, and for a company to grow in such a difficult environment, it must be aware of what its customers want. Savings levels have increased and we introduced the fixed-term savings account in response. Our new health insurance product is a value proposition and we have also introduced monthly payment plans for some of our products," she said.
She said one of the company’s biggest achievements in 2009 was broadening its sales channels. Postbank’s products are available in about 1,000 post offices nationwide, but are also available through direct sales via the phone and internet.
In 35 of the bigger post offices around the country, Postbank has its own dedicated teams in place, operating in so-called ‘financial zones’. In a further 12 post offices nationwide, Postbank financial zones are operated by An Post staff, with support from qualified financial advisers from Postbank.
The bank’s direct sales team operates from a customer care centre in Athlone, Co Westmeath.
Sweeney said the One Direct brand, the name still attached to car and home insurance products, would be fully merged into the Postbank brand in the year ahead.
When Postbank launched first, it aimed to be profitable within three years, meaning 2010 is the year that its target should be met. Sweeney said profitability was not too far away, and should be achieved within the next year or so.
Emma Kennedy
Rockall Technologies
Four months into 2009, Irish software firm Rockall Technologies reported turnover of €4million for the financial year to the end of April. This marked a doubling of its turnover in the year to April 2008.
Luke Nestor, chief executive of Rockall, said the company’s strength lay in the fact that its technology related to risk management.
Across 2007 and 2008, a collateral management solution designed by the company was introduced by six of the 12 Federal Home Loan Banks (FHLB) in the United States, as financial institutions become increasingly aware of compliance issues related to collateral and loan management due to the crisis in the global financial markets.
The 12 FHLB banks act as a bankers’ bank and provide primary liquidity to most of the financial institutions in the US.
Rockall’s technology provides a liquid and loan book collateral tracking system for six of the 12 banks.
Nestor said the company had hoped to sign contracts with some of the remaining six in 2009, but said discussions were still ongoing. Ultimately, he hopes to have all 12 banks as clients.
During 2009, Rockall secured major contracts with three large US retail banks, including US Bancorp and Wells Fargo. It also signed a contract for its technology with the Standard Bank of South Africa.
At the end of 2008, Rockall had considered raising funding to help grow the business.
However, Nestor said the company had decided against this, for now. ‘‘We are debt-free, so we decided not to go for it," he said.
The firm has availed of the Business Expansion Scheme for small-scale funding, but has no plans to look at a largerscale funding round.
Nestor predicted that the company would continue to increase its revenues this year and said he expected turnover of about €5.5 million for the financial year to the end of April 2010.
He said the company had been profitable, albeit marginally, since inception and hoped to increase its profitability in the year ahead.
During 2009, the biggest challenge for the company was the dollar’s weakness, given that most of Rockall’s business is dollar-denominated. However, despite this, Nestor still described 2009 as an excellent year for the company. He said the company hoped to grow its US business further in 2010, and said it was also in advanced negotiations with two Italian retail banks.
Rockall was set up in 2000, but its founders had been working on the collateral management software since the 1990s.
The firm started selling its product in 2002, and quickly signed up a number of clients, including AIB, Bank of Ireland, EBS and National Australia Group.
Its first client in the US was the financial services firm Wachovia, with a deal struck between the two firms in 2004.
Rockall employs almost 50 staff, and has offices in both Dublin and the US.
Emma Kennedy
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