One of the impacts of the growing number of hotels and guesthouses given over to migrant and asylum accommodation is the negative effect on local economies.
This is particularly the case where an increasing number of what used to serve as tourist beds are being contracted to the state for such accommodation.
Almost 30% of Irish tourist beds were under contracts with the Minister Roderic O’Gorman’s Department at the end of 2023 and the Irish Tourist Industry Confederation (ITIC) was forecasting that the sector will lose in the region of €1 billion in 2024 as a consequence of this.
Usually when a company invests in a local business there is a positive multiplier effect. That is certainly the case when a hotel opens in a town and brings additional footfall to other retailers and service providers.
The opposite would seem to be the case with the effective substitution of tourists with all the benefits that brings to ancillary small businesses by a whole new class of state dependents.
Drakeford Limited, which owns the Blarney Stone guesthouse on the Western Road, Cork City, is a good example of a company that appears to have made a decision to operate a guesthouse in order to provide refugee accommodation in preference to taking in guests. None of the principals appear to have any background in the tourist sector.
If you go on to the Blarney Stone booking page, they present an attractive package for anyone intending to visit Cork and use it as a base to explore the city centre – which is less than a ten-minute walk away – or to perhaps catch a match at Páirc Uí Chaoimh, Páirc Uí Rinn, or Turners Cross.
Unfortunately, there is currently no availability as the impressive looking old guesthouse is fully booked, every single room on every single day between now and November 30th, for the accommodation of people claiming International Protection.
If the Blarney Stone was open for normal business a room for the night would cost between €145 for a single room, to €179 for a Superior Double Room. There are 12 rooms so assuming an average occupancy of 81% for Cork, as per Failte Ireland, the Blarney Stone might expect to have a monthly revenue of around €50,000 if we are to be generous.
That of course is exclusive of all the normal costs of running a guesthouse which are presumably significantly lower when catering for mostly single male asylum seekers.
The accommodation providers are required to retain the guesthouse as an address for purposes of payments and food allowances. Apart from being less labour intensive, the provision of accommodation to persons in International Protection process or Temporary Protection is exempt from VAT.
According to the list of payments made to providers of International Protection accommodation and services, since taking over the Blarney Stone, Drakeford have drawn down a total of €629,480 over five monthly instalments beginning on June 1, 2023, when they received €206,400, presumably the first tranche of payments for the Blarney Stone contract.
If our calculations regarding the likely revenue from the guesthouse – if it was still a guesthouse – are correct then the Drakeford investment has earned some 2.5 times what they would have done if they were putting up people visiting the city as tourists or perhaps business visitors rather than accommodating people being housed at the expense of the state.
Five months earning €50,000 per month for the likely more difficult role of accommodating paying guests would have earned the guesthouse some €250,000.
The Blarney Stone was owned by Angela and Daniel Harnett but was bought by Drakeford Limited in April 2023. Drakeford was incorporated in July 2022, and its original directors were William Curran, Clodagh and Adrian McCarthy, Marguerite Moynihan and Connor Rainsford. The two current directors are Rainsford and Glen Gomesz, who was the night porter at the guesthouse. The purchase was financed by mortgage through Glenigo Capital.
Inspired by the success of their Blarney Stone venture, Drakeford bought Abbeyville House in Fermoy in October 2023, also to provide accommodation for persons claiming International Protection here. That has led to an ongoing protest by local people organised in the Save Abbeyville House campaign. That purchase was also financed through Glenigo.
There have been some unconfirmed reports that Abbeyville has been sold to another investor due to the current owner’s discomfort at the protest and the attention it has drawn.
Abbeyville House contains 12 bedrooms. The proposal made by Drakeford to IPPS proposed to accommodate 56 persons.
The purchase of Abbeyville by Drakeford was also financed through Glenigo Capital. Glenigo is owned by Orla and Liam Mannion.
Liam Mannion used to work for Anglo Irish Bank’s Corporate Treasury section. Orla Mannion was formerly with the global asset management company SEI.
Drakeford is jointly owned by Adrian McCarthy and Killerisk Investment Holdings. It declared assets of just over €2 million immediately after the purchase of the Blarney Stone. It stated that “The principal activity of the company is the provision of car cleaning services and the rental of property.” The company was stated to be controlled by Connor Rainsford, and had modest staff costs of €16,353.
Adrian McCarthy was previously a director of Baltimore Holiday Homes and is currently the major shareholder in Sincere Condolences Limited.
Killerisk is owned by Marguerite Moynihan and is a specialised retail company based in Tralee.
Moynihan also owns FOHNTECH which is also based in Tralee and for whom McCarthy is Chief Sales Officer.
Connor Rainsford who is responsible for the day to day running of Drakeford is based in Shrule, County Mayo. He owns his own accountancy firm and is, also along with Gomesz, a director of Custom Edge which was established in October last year and shares the same address as Drakeford.
Drakeford provides an interesting case study then of the sort of companies and investors who are attracted to a hugely lucrative asylum sector. The cheques are guaranteed and are not only immune from the vagaries of real enterprise, but would appear to have much lower costs. The returns would certainly seem to be higher.
Gript sent a number of questions to the Blarney Stone guesthouse regarding the number of persons currently staying in the building, and how long they expected the contract to accommodate International Protection applicants would last, in the light of the fact that bookings are currently unavailable. We had received no response prior to publication.