Hotels in Dublin
It is clear that Dublin is currently facing a shortage in hotel accommodation, both in the city centre and in its outlying areas. This is most easily identified by the cost of hotel rooms in the capital – to reserve a double room in 4 star hotel in Dublin this Saturday night would cost between €250 – €350, excluding breakfast!
Therefore, it comes as no surprise to see regular announcements of plans to build new hotels across the city.
Similar developments have been announced for sites on the north and south side of the city. However, Board Fáilte has indicated that even with developments currently in the pipeline the demand for rooms will not be met.
So, in terms of opportunities in the Irish property market, it is no surprise that rundown hotels, or historic buildings ripe for development, are where a significant portion of investment is being allocated.
For these projects planning is generally the headline issue. However, what is often overlooked at the outset is the suitably of the proposed premises for liquor licensing. All hotels will require the use of a ‘bar’, so it is essential that the property/premises selected for development is capable of being licensed.
Licensing a Hotel
There are a number of methods of licensing a hotel to serve alcohol to its guests and indeed members of the public.
Unconditional Publican’s Licence:
Obtaining a seven day ordinary licence in respect of the premises is the least restrictive method of licensing a Hotel premises. Some of the oldest and best known hotels in the capital are licensed in this fashion, such as The Shelbourne Hotel and The Gresham Hotel. This is because these establishments pre-dated the creation of the “hotel” licence provided for in the Licensing (Ireland) Act, 1902. However, this method of licensing a hotel premises has recently come back into vogue due to the restrictions associated with a “hotel” licence.
As with all applications to licence any premises with a “new” publican’s licence, the applicant must be in a position to offer an existing publican’s licence for extinguishment. Purchasing such licences for extinguishment involves an investment of approximately €60,000.00 – €90,000.00 on behalf of an applicant.
The applicant will also have to satisfy the Court, amongst other things, that the new hotel premises has never previously been licensed with a publican’s licence. This is confirmed through a search of the licensing register as far back as records exist, which should be verified by a search of the Valuation Office against the address of the premise. It would be worthwhile for this search to be undertaken prior to purchase. If the premise was previously licensed, it can significantly complicate a licensing application and could be leverage to reduce the purchase price.
Hotel Licence
Section 2 (2) of the Licensing (Ireland) Act, 1902 created a form of conditional publican’s licence which could attach to a “hotel” premises.
In order to fall within the definition of “hotel” under the 1902 Act, a premises must:
- hold at least twenty bedrooms if located in a “County Borough”, which can be taken to mean a city, or ten bedrooms if located outside a city; and
- NOT have a public bar.
The requirement at 2) above is clearly very restrictive on modern hoteliers, one could even go so far as to say it is unworkable. Accordingly, s. 19 of the Intoxicating Liquor Act, 1960 provides a means for hotel proprietors of hotels to apply to the District Court for permission to have a public bar in the premises. However, in order to make such an application, proprietors must again proffer a full ordinary seven day on-licence for extinguishment to the Court.
It is important to note that making an application under s. 19 does not convert what was previously a “hotel” licence, into a full publican’s licence, notwithstanding that an applicant has extinguished a publican’s licence in return for it. The hotel licence remains a hotel licence and as such the proprietor must continue to maintain the bedroom requirement set out in s.2(2) of the 1902 Act. Furthermore, it is generally accepted that a “hotel” licence may not be sold on for extinguishment in return for a new publican’s licence.
A “hotel” licence which predates 4 July 1960 may be converted to a full publican’s licence if certain conditions are met.
Current Trends
Given the above restrictions attaching to hotel licences,it is unsurprising that more and more developers of new hotel premises are choosing to licence them with full publican’s licences. Quite apart from anything else, licensing the premises in this manner means that the licence will retain its investment value, and could possibly increase in value.
Publican’s licences which are suitable for extinguishment can be difficult to source depending on market conditions, and therefore It is worthwhile attempting to secure a licence at the outset of the development rather than a few weeks before the licensing application, otherwise it may be necessary to pay a premium to ensure that you have a clean licence to extinguish.
Declaratory Procedure
For a hotel developer, the declaratory procedure for licensing applications is also worth considering. The declaratory procedure allows an applicant to apply to the Circuit Court, in advance of initiating works on the premises, for confirmation that the proposed hotel as outlined is suitable to be licensed. The declaratory stage is the substantive stage and objectors will be called. If the declaratory order is granted, the risk of any complications arising at the certificate stage (when the licence is granted) are significantly reduced. Furthermore, there is less likely to be any delay in opening by reason of objectors, as objectors will have been dealt with at the declaratory application.
Ogier Leman provide expert advice in respect of all aspects of the hospitality industry, including liquor licensing. For further information, please contact Catherine Lyons and Maria Edgeworth.