Craic On

Caiseal Mara Hotel

It has 48 bedrooms, a Function room that has 300 seats and a smaller one which can take 80-100. It has a good-sized restaurant and a bar. It was on the market 3 or 4 years ago at €1.8m – and that was after it was put into administration. God knows what it would have been valued at during the peak of the boom.

A few months ago it was put on the market at €350,000.

Now it is one the website of Allsop Space with a Reserve Price of €175,000. That means, basically, offers over €175,000. That’s around £150,000 at current sterling rates. That was only the price of a decent house a few years ago not a hotel with 48 bedrooms plum in the centre of the town.

That’s a real steal. even at its previously value of €350,000 Al Diesan, who played such a great DylanFest, told me that he could sell his apartment in Cagliari, Sardinia and buy it.

Why so Cheap?

So, why is it so cheap and why has no one bought it?

The reason it is so cheap is that we have reached what is called Capitulation on the market. The banks own one in every three hotel beds in Ireland as well as countless pubs and restaurants. Their original strategy was to keep the businesses open and get a reasonable market price for them. That hasn’t worked due to the state of the economy.

Now the banks have decided that they want to run banks (even though the past few years have shown that they didn’t do that very well) rather than hotels, pubs and restaurants. Therefore their current strategy is to just get any price they can for them and to get them off their hands so that they can concentrate on their core competency which is banking (sic).

Why Has No One Bought It?

So, why have they not had their hands snapped off at such knockdown prices for the Caiseal Mara. I’m told it is because of the running costs. The next pieces of information I haven’t been able to check but I’m told by inside sources that they are true.

I’m told that Business Rates for the Caiseal Mara are €10,000 a month and the total running costs are €17,000 a month So, even though you might be able to get it for €175,000 you would have costs of €204,000 a year. Again I must say is that this is what I have been told.

That’s an awful lot of food and beer and hotel beds to sell. However, the Redcastle is doing a roaring trade and I’m told that in other parts of Donegal hotels are doing very well. If you were ever to buy a hotel this would be the time to do it. With the economy just starting to recover it will be a long time before businesses are so cheap again. In ten years time this could look like an absolute steal.

For more details of the auctioneers see Caiseal Mara for Sale

Update:-

I now see that the info I had been given about Business Rates is wrong (or have changed). According to the auctioneer’s website they are now €31,197.01 annually. That’s not nearly so bad.