Photo empire to luxury hotel: the rise, fall and rise again of Xavier McAuliffe

Throughout his life, making money has always come easy - keeping it was the problem, the tycoon tells Fearghal O'Connor

Xavier McAuliffe at his Lyrath Estate Hotel in Kilkenny. Photo: Dylan Vaughan

Fearghal O'Connor

Xavier McAuliffe bounds up the stairs from the grand lobby of his luxurious Lyrath estate two steps at a time. He has the renewed vigour of someone who had lost something precious but has found it again.

At the top of the steps the 72-year-old hotelier - and sometimes developer, builder, flying instructor, speed-camera controller, television personality, photography magnate and one-time Bonnie Baby photographer - gestures with an enthusiastically broad sweep of his hand.

In his mind's eye he sees a brand new bistro with a trendy open kitchen and happy guests in the, for now, hidden mezzanine space, which opens in less than a week from now. To the less visionary, all there is to be seen is a busy hive of workmen, carpentry tools, awkwardly-placed kitchen equipment and half-built seating areas.

The bistro project is the culmination of an almost completed €5m refurbishment programme aimed at returning the hotel to how McAuliffe left it on the dark day in 2012 when Bank of Scotland's receivers walked in and took the keys to the luxurious estate on the edge of Kilkenny city from him.

"It was emotional obviously ... to walk away from something like this. But Bank of Scotland had done the same thing at a lot of hotels in the country," he says.

McAuliffe is still angry about some of the wider issues involved in the collapse of the economy, but says he feels no bitterness regarding how his own situation played out.

"I owed them money and it had to be paid. That's business. You win some, you lose some and I paid back my debt. The bank walked away with more money than they normally get in these situations. I walked out the door with my head held high because I had created something great."

"I was very well off at the time," he says. "According to the newspaper I was worth €50m but paper never refused ink. But when this place went I personally lost €10m. I lost another €10m on my African properties and I lost another €10m on my property business in Ireland."

It was a stressful time but McAuliffe now has his eyes set on the future: "It's good to be back. I was on sabbatical for four years."

Back to the future

Back down below in the lobby, McAuliffe closely examines a row of huge Chinese-made Greek-style statues. He leans over one pointing out a thin crack that splits its base. It was dropped as it was being installed as cameras recorded every moment for RTE's reality TV show Five Star in 2006, which charted the construction and opening of the exclusive five-star hotel. It had 139 bedrooms and a conference centre - where country music star Nathan Carter played last Thursday - and it's main kitchen could turn out 1,000 meals. The construction job reportedly cost €50m.

"When we opened first, all the grannies would come in to look at where the statue was damaged. It was great for business in the beginning," he says.

McAuliffe does not miss any detail as he walks up and down the corridors of his hotel.

"Lucozade," he snarls, pointing to a sickly patch of carpet on the corridor outside one of the hotel's luxury rooms. McAuliffe is striding through the new wing that he and a South African architect designed after he bought the 170-acre estate.

The tarnished carpet, laid 11 years ago when McAuliffe first bought the estate, will be replaced later this month as part of the refurbishment programme. When the last huge roll of luxury carpet is laid, McAuliffe - should he choose to do so - can relax in the knowledge that Lyrath estate is once again exactly where he wants it to be.

Easy come, easy go

"I always found it easy to make money, right throughout my life," McAuliffe had earlier proclaimed, sipping a flat white in the quiet cafe at one end of the lobby,

It is not said boastfully. Just presented as the self-evident fact it seems to be. But it is only half the facts. Many of McAuliffe's most interesting stories revolve around how he lost money too. How he tried, succeeded and, sometimes, failed. Often his losses were the result, not of his own doing, but of being caught on the wrong side of shifting economic sands. And any losses usually prompted an evolution of his approach and the birth of a new venture.

At 15, young Xavier hatched a plan to buy a supermarket in Listowel. He is from a long line of builders so doing business was in his blood. His grandfather was a famous plasterer and builder throughout north Kerry and left towns like Listowel and Abbeyfeale with a legacy of wonderfully flamboyant stucco work on many commercial buildings and shopfronts.

But life in Listowel in the late '50s and early '60s was far from flamboyant. It was the grim days before Kerry co-op, EEC subsidies and the building of the nearby Tarbert and Moneypoint power stations brought wealth to the area.

"In the street I lived in I would say there were only four fathers. The rest of them were in England. The cheque would come every Friday in the post. They were really tough times in the country. Most people would only see their father at Christmas. He would come home and make the wife pregnant and then go back again."

McAuliffe's father, a man of few words, was able to stay at home because of his job as a builder with the Board of Works.

"There were two tailors, a taxi driver and my father. The rest of them were in the UK. It was very lonely.

"We were never left wanting but my father would never have had a bank account. He would never have borrowed, yet there is his son borrowing millions and millions afterwards."

In the mid-60s, the supermarket plan long forgotten, McAuliffe got a summer job in the photographic processing laboratory in Butlins holiday camp in Co Meath and ended up also working as the camp's press photographer.

"I used to do the Bonnie Baby competitions, Glamorous Grannies, Miss Elegance and all of those sorts of things. It was fantastic. There were 3,000 campers from all around Ireland and 1,000 staff and as a young fella from Kerry there were lots of girls to chase. It was a fabulous place."

McAuliffe would work on commission in the evenings taking photos of campers and selling them back to them the following day.

"I used to make a pile of money," he recalls.

But McAuliffe realised he was more interested in the technical side of photography. He moved back to Listowel and started processing black and white photos in a makeshift laboratory in his back garden where his first really successful company, Spectra Photo, was born.

"I used to process the films in the morning, get in a van and drive around Kerry delivering them, pick up the films and then go home and start again. The Killarney market was booming."

In 1970 Ben Sherman, the shirtmaker, had diversified into photo processing in the UK but his expensive new plant in Bournemouth had quickly gone bust.

"I flew into London and met Ben Sherman. He picked me up in a massive Merc. His daughter was having her birthday that evening and he invited me onto his yacht. He was quite a character. I agreed to buy all the processing machines from his plant. So a friend of mine and myself drove over on the ferry on a freezing cold Good Friday to dismantle the machines, put them in vans and drive them back to Listowel."

McAuliffe then built a 5,000 sq ft plant in the town to house the machines, allowing him to move Spectra out of the garden shed.

"All my family were in the building business so I was well able to do any building job. I remember pouring concrete for the foundations of the plant and it was so cold that I went down and bought a bottle of whiskey to keep the guys on the site. I'm still like that. I keep on top of people to make sure they finish. I drive the chefs here mad telling them they are overcooking the steak. But I will also do anything that needs to be done myself. If I see something on the floor I pick it up. I can't understand how other people would walk past it."

Photographic empire

As holiday snaps proliferated through the 1970s, Spectra boomed and it became the agent for Kodak in Ireland. McAuliffe bought 10 huge £500,000 printers that could do 25,000 prints each in an hour allowing Spectra to fire out 24 million prints a year, all delivered overnight, generating £4m in annual profits. Overseas expansion saw him open seven shops in Miami with one close to where the cruise liners docked turning over $2.5m per annum.

His accountants drew up a three-year financial projection: "I couldn't believe that I was going to make so much money. We bought everyone else in the business, including Belmont in the North. It was good fun. I worked hard and played hard, in that order. I loved that business."

Then came the digital camera: "Kodak was way behind. I always remember the president of Kodak, the largest company in the world at the time, saying 'innovate or die'. But they didn't move fast enough so they died. We saw digital come in but nobody expected it to come so quickly. People were thinking 'ignore it and it will go away'. But Kodak disappeared. It was incredible."

McAuliffe looked to diversify. He invested €3m in brand new digital printers. But people were not only not using film, they weren't printing their digital shots at all.

In 2009 he finally shut the doors on Spectra, moving many of the staff to a new company called Go Safe, also based in Listowel.

That company, 42pc owned by McAuliffe, is a joint venture with international camera company Redflex and French state toll road company Egis. It has just won a renewed six-year contract to run Ireland's mobile speed camera network and now has a turnover of €13m a year.

But as Spectra shrank, McAuliffe had diversified in other ways too, building a portfolio of hotels, a 50pc share of a food processing company in Listowel, a security company in Kilkenny.

In England he rebuilt an old burnt out mansion in Devon, installing the longest swimming pool in Britain, selling high-end houses on the property.

The highs and the lows

From the beginning, the purchase of Lyrath from beef baron Paschal Phelan in 2002 was tricky. A deal was struck just before Christmas for €2.5m but one of the investors pulled out at the last moment. When McAuliffe went back after Christmas to secure the deal with a new partner the price had risen to €3.5m.

"During the next three years everything went crazy. People went crazy. Banks went crazy. I went to Bank of Scotland and they gave me €18m and I bought out the other investors. We had really lost the run of ourselves at that point. Imagine ... the bank gave me €18m towards a property that three years earlier had been worth €3.5m. It was crazy stuff. Greed had set in and it was everywhere."

When the inevitable crash came, business at Lyrath was slashed in half.

"Our loan repayments had been €1.2m but we had an agreement with the Bank of Scotland to cut them to €600,000," says McAuliffe. After two years of that, Bank of Scotland decided to pull the plug as part of a general retreat from Ireland.

"They were getting paid but they called in all their Irish loans and put in receivers after they shut their operations in Ireland. They had a lot of crap on their books because there were hotels built in places they should never be built so they wanted to use a trophy asset like Lyrath to try and sell some of that stuff. We tried dealing with them to get it back at that stage but we couldn't."

Although more than 100 investors that had been assembled into a tax-efficient consortium by McAuliffe to fund the hotel development walked away, he himself had a debt of €12m with Bank of Scotland secured on the land and, when the whistle went, he was left standing holding the ball.

Eventually, McAuliffe reached a settlement with the bank. He sold the River Court Hotel - also in Kilkenny - to pay off his debt as well as handing over Lyrath to the bank.

Jurassic Park

At the time he had three hotels in South Africa and a lodge in Mozambique. His Kruger Park property included an 18-hole golf course through which the wild animals would wander.

"There were hippo and crocs in the ponds and lions would come in the evening. The elephants would sometimes break down the fences and come right across the course. It was like my own Jurassic Park."

It was sold off. But the jewel in McAuliffe's South African portfolio was in Cape Town, where he had built the luxurious 22-storey Hibernian Towers apartment building.

"I had lost money on that building. When we went to build it we had to have 60pc of it sold before the bank would give us money. A lot of our customers were Irish. So when the crash came I had 25 Irish people who had paid their deposits but couldn't come up with the rest of the money. We were paying 15pc interest on the money at the time so we were strangled."

McAuliffe's loans and properties never ended up in Nama but he was deeply concerned as to where things were going for him.

"Ireland was in an awful state and people were advising me to get out of the country but I had no interest in doing that."

A housing estate he had built in Kilkenny sat unloved: "For three years ... zilch. Not one person even made an enquiry. The properties went from €500,000 to €150,000."

Business abroad also came to a halt. In Panama he had bought a site and obtained full planning permission for two towers. But the recession hit and the towers were not built.

After the receivers took the keys of Lyrath and his South African properties were offloaded, McAuliffe focused on his remaining businesses. Life became somewhat simpler. For one thing, gone were the helicopters. "That was a bit excessive," he says, but points out that the two aircraft were also used in a business called Heli Golf to fly rich Americans to the best Irish golf courses.

Finally, McAuliffe was ready to start his fightback, beginning with the purchase of the Springhill Hotel in Kilkenny for €2.8m: "It was a dump and we brought in our own people to do the work and it's worth €7m or €8m now and it's flying."

From the day McAuliffe left Lyrath he says Bank of Ireland were happy to finance his return to it.

"I had a verbal agreement for funds to buy back this place from day one. Receiverships normally take two years but they were making money here so they stayed on until the very end."

It cost McAuliffe over €25m to buy back the estate, financed by Bank of Ireland and a very small number of investors, mainly family.

Another €5m is being spent to bring back the hotel to what it was when he handed back the keys because, he says, when he finally did get to buy back the property it had lost much of the sparkle that it had at the end of the original construction.

"The wifi was broken as were many of the televisions in the hotel rooms. Toilets were leaking in 66 rooms, furniture that had broken over the years had been thrown out and not replaced, the fountains in the garden were broken."

After 15 months back in the hotel, the restoration work in the hotel's magnificent lobby will be completed this week. McAuliffe already has begun planning for a new €2.5m pavilion in the property's walled garden to accommodate parties - weddings for example - of 250 people that he hopes to build over the next year or so. He has also spoken to local planners about building a retirement village in one corner of the 170-acre estate.

"We are doing well. Most of our business is coming from Dublin but we are fighting to win back business from American and English companies that was lost during the receivership.

"It takes a couple of years to get that back but we are making money and reinvesting it. I have more control this time. In the original deal there were 120 investors and a put and call option to buy them out after a number of years. But now it is mainly family."

McAuliffe looks younger than his 72 years. He pulls out his smartphone to show how he keeps himself fit and flicks rapidly through his step counter to show how far his daily rounds of the hotel carry him: 6,000 steps one day, 7,000 the next, 5,000 the next. Relaxation does not come naturally.

"I do enjoy a nice glass of wine two, three, four nights a week. But I don't have too many friends in Kilkenny. It tends to be hotel industry people," he says. "I don't read books. I read an awful lot of instruction manuals. In my lifetime I have read about five books. I just don't have the patience."

Retirement seems an unlikely plan, so.