There were fears last weekend that hotels under the Dunne Group umbrella, including the Two-Mile Inn and Patrick Punch's, could face closure after the company petitioned the High Court to be placed into examinership.

The petition means that a High Court-appointed examiner will now attempt to devise a financial rescue plan for the Dunne Group, which made a pre-tax loss of €1.1m in 2006.

However a spokesman for the group said this week that, thanks in large part to a franchise agreement with Ramada Hotels, the future of Dunne Group Hotels should be safe.

"We heard all the rumours as much as everyone else, but the fact is 93 per cent of companies that go into receivership manage to recover.
"The High Court has validated our business plan by allowing us go into examinership and that was helped by the fact that we have a solid business plan, which includes a 20-year franchise agreement with Ramada," said Christy Power, group commercial director.

Absolutehotel also issued a statement denying rumours that the hotel was to close due to poor business.

"It's not helpful for business when rumours like this start, because rumours get wings. These rumours are completely false and we are confident we will become an institution in the city long into the future," said general manager Donnacha Hurley.

While the Dunne Group and Absolutehotel are confident of their financial survival, a statement from the Irish Hotels' Federation this week highlighted the difficult period ahead for hoteliers.

The IHF called for wage restraint in the short to medium term "in light of the major challenges facing the hotel sector due to a substantial slowdown in domestic consumer demand.

"While discussions are at present ongoing among the social partners on national wage rates, labour intensive sectors such as the hospitality sector cannot afford any further wage increases until there is a return to a solid and sustainable cost basis, coupled with a substantial increase in domestic demand," said Michael Vaughan, Shannon IHF branch chairman.