RNS Number:3671L
Gresham Hotel Group Plc
21 May 2003





Embargo 11:00am Wednesday 21 May 2003



                             Gresham Hotel Group plc



                               Chairman's Address



Dear Shareholders,

I would like to introduce myself as Harvey Soning and it gives me great pleasure
to address you in my capacity as Non-Executive Chairman.  I welcome the
privilege of working with my fellow Directors in shaping and driving the
business of your Group through its next vital stage of development.



I am very conscious that the last time we met was under difficult circumstances
during which I appreciate that there were differing opinions from various
quarters, however I would like to emphasise the importance of looking to the
future to secure shareholder value for all.



Under the stewardship of the then Chairman and Chief Executive, Patrick Coyle,
the newly constituted Board quickly established a healthy and cohesive working
environment which enabled us to examine the strategic direction of the Group.



Arising from this review your Board believes that it is in the best interests of
the Company to concentrate its activities on city centre properties with
specific emphasis on bedroom, meeting and conference facilities with limited
ground floor activity.  This is the model which we currently operate in our
hotels outside Ireland which has proved successful and we believe will form the
platform for sustainable growth going forward.



It is also our intention to cluster our properties where appropriate, that is to
operate a number of hotels in select locations rather than having a geographical
spread which is too thin.  This strategy will also enable to Group to obtain
operational and marketing efficiencies.



The Group has embarked on a strategy of extracting value from our existing
properties by initiating the planning process in relation to our excess lands,
and I specifically refer to lands at the Killarney and Limerick hotels.  A
planning application has also been submitted for the further expansion of
facilities in this hotel, 'The Gresham', through the addition of 14 meeting
rooms and a leisure facility.  In addition we have received planning for
additional meeting space at the Gresham Metropole in Cork.



Your Group is fortunate to have an excellent property portfolio which is mainly
freehold has been recently extensively refurbished and are in prime locations.
It is our intention to maximise the benefits of this through releasing
shareholder value where appropriate and facilitating further expansion through a
mixture of leasing and management contracts.



Whilst the Group still faces the challenges of increasing operational costs,
particularly in Ireland, I am pleased to say that through a number of
organisational changes which have been made both at Head Office and at hotel
level in the last year, that in excess of Euro1m has been removed from our cost
base, the benefit of which will be derived in the current and future years.



At this stage I would like to introduce you to Mr Jim O'Leary who has just been
co-opted onto the Board.  Mr O'Leary is currently a director of AIB and a
lecturer of economics in NUI Maynooth, having previously been a chief economist
with Davy Stockbrokers.  I am confident that his contribution to the board will
be of great benefit as we enter an exciting phase of our development.



I would now like to turn to the trading performance for the period under review.
  It was without doubt a difficult period for the Group on a number of fronts
with trading being impacted by the slowdown in domestic and international
markets, the continuing negative impact of September 11, and the considerable
level of International uncertainty, prior to and following the conflict in Iraq.




This challenging market environment was not helped by increases in insurance and
payroll costs.  Exceptional costs for the period amounted to Euro1.1m which
reflected professional fees relating to events leading up to the EGM of last
year and contractual payments which were made to the former directors and
Chairman.



Despite these challenging times your Group has positioned itself to take
advantage of improving markets, through an investment programme whereby all of
our properties have been significantly upgraded.



Based on current market conditions your Board is recommending a reduced dividend
of one cent per share.  We are committed to providing our shareholders with a
dividend, however this must be viewed in the context of trading and be set
accordingly.  Subject to approval later in the meeting it is intended to pay the
dividend on the 30th May.



This is the third year in succession that the industry has faced very
significant external shocks, starting with Foot & Mouth, 11 September, the Iraqi
conflict and more recently the worrying development of the SARS virus.  I feel,
rather than lamenting the impact that these events have had, it is incumbent on
us in the industry to refocus, re-examine and execute a strategy which adopts
appropriate business models to prosper in the new environment in which we find
ourselves.



Nevertheless, given the importance that tourism plays in the Irish economy it is
also incumbent on the Government to ensure that the industry is supported and
provided with the necessary tools to maintain and grow its share as markets
improve - which they will.



This process could be greatly facilitated through increased marketing, and the
provision of a low cost terminal at Dublin Airport.  Also the development of a
National Convention Centre which has now been on the agenda for a number of
years - immediate action is required.



I feel I must refer to recent speculation in relation to our West Coast hotels.
Since the announcement of our results in March, the Group has received
approaches in relation to a number of our properties.  I would like to stress
that the Board has a duty to examine and explore any serious approaches, however
I can assure you that any movements in this regard would be based on value for
shareholders and safeguarding the interests of our staff.



Since becoming involved with the Company I have been very impressed with the
people within the organisation.  It is obvious that there is a genuine culture
of customer care and a professionalism which has served the Company well and
will certainly facilitate its future development.  I would like to take this
opportunity to express the Board's gratitude to every member of staff for their
commitment over the last year.



On a personal note I would like to thank Patrick Coyle, on behalf of your Board,
for the way he has steered your company through the internal and economic storms
over the past months.  Without his cool captaincy this company could have been a
lot worse off.  I am sure everybody here will agree with me.  Thank you Patrick.



Finally, I would like to talk about the trading conditions in the current year.
As previously stated the market conditions remain challenging with long-haul
markets such as the U.S., Canada and Australia being the most adversely affected
by the recent conflict in Iraq and the SARS virus.  I can confirm that trading
in the first quarter of the year is marginally ahead of the same period last
year, however I would stress that the reduced visibility within the market still
persists.



That concludes my remarks however before proposing that the Financial Statements
be accepted, I will endeavour to deal with any questions which you may wish to
ask.





This announcement has been issued through the Companies Announcement Service of

                           the Irish Stock Exchange.












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