A gun to their heads, the Great Southern directors had little option. Group borrowings were 40m. The hotels were haemorrhaging money. The only way forward was to sell, the directors decided at a board meeting on 27 January. Otherwise, they believed, they risked being held personally liable for reckless trading.

Losses in 2006 were projected to reach over 7m if the interest rate payments were required. It was revealed last week that the hotels require capital investment estimated at 80m.

Work practices such as fixed rosters and strict job demarcation had driven staff costs to 46% of turnover by 2004, a figure likely to rise in 2005.

This compared with an industry norm of 34% or less.

Something had to be done.

Last Monday, the board of Dublin Airport Authority (DAA) endorsed the Great Southern directors' decision.

The DAA has been keen to sell the hotels for years, barred from doing so by political reluctance to stir up a storm among unions and local constituents.

Government has at last acknowledged that appeasement is no longer an option.

Transport minister Martin Cullen briefed Cabinet members on Tuesday that Great Southern Hotels' losses approached 6m last year, up from 2.2m in 2004. Given the level of expected losses, he told cabinet, the Great Southern directors did not believe they would be in a position to sign off the 2005 accounts without clarification on future financial support.

Within a couple of weeks, the DAA is expected to announce the appointment of consultants to advise on the disposal of the hotels owned by Aer Rianta since 1991. The intention is to have the whole business done and dusted before the end of this year. Government has indicated that the plan is to sell the hotels on a "going concern" basis. It should prove a lively political ride.

Great Southern's properties are a mixed bag of business and leisure hotels, and highly unlikely to appeal to a single buyer, unless a deal included an option to break up the group subsequently.

Of the eight wholly-owned hotels, it is understood only the airport hotels in Dublin, Shannon and Cork have been trading reasonably successfully.

The Dublin hotel is the group's most profitable, could carry a price tag of around 40m and would be likely to attract interest from major players such as Jurys Doyle.

Cork Airport's new terminal will be an attraction of that airport's Great Southern hotel, for which a proposal to build an extra 60 rooms is in the planning process.

The blackest spots in the group are believed to be the Great Southern in Rosslare and the Corrib Great Southern in Galway. The three-star Rosslare is recognised to need substantial investment even to keep that grade.

Four-star-rated Corrib has been hit by the 2001 opening of Galway's snazzier fourstar Radisson, and faces future competition from a proposed 200-bedroom hotel at Ballybrit.

Other group hotels suffer from business seasonality.

But, in reality, whatever deal is done won't be just about performance. Corrib, for example, may not turn in stellar numbers but sits on a 6.7 acre footprint and offers development potential. Killarney is on more than 12 acres.

Parknasilla, which sits on a 299-acre estate, offers opportunities that did not go unrecognised by the DAA. A joint venture proposal with Bernard McNamara, which is in the planning pipeline, would involve building housing, extending the golf facilities and developing a small marina. Industry sources suggested the remote hotel could tempt a buyer interested in developing yet another destination spa hotel.

Other properties, such as the Great Southern on Galway's Eyre Square, do not offer the same development promise. With only 99 rooms, that hotel is likely to be considered too small to be viable.

On the other hand, it adjoins a tract of CIE-owned land zoned for development, and might put joint venture ideas into a developer's head.

One certainty is that any disposal plan will prompt local outcry. Independent TD Jackie Healy-Rae, who fought the 2002 8m sale of the Torc in Killarney to fund the refurbishment of the older Killarney hotel, was one of the first out of the outraged traps last week.

Whatever fuss is made, the decision to sell is not before time. Aer Rianta has wanted to sell out since 1999, when government came close to agreeing but then backed down. The saga has rumbled on for six years during which Ireland's hotel landscape has been transformed.

A decade ago, Ireland had 26,000 hotel rooms. This is expected to double to 52,000 this year. In the past few years, international chains have arrived, and both hotel chains and developers are understood to have made approaches to Great Southern over the years.

Last week's announcement that a sale is finally going to happen comes after a turbulent and peripatetic life for the Great Southern hotels.

A government bail-out of 3.8m was followed by a transfer of ownership in 1984 from loss-making CIE to Cert, which in recent years has merged with Bord Failte to become Failte Ireland. The hotel group got an independent board and by 1986 was trading profitably. But it still needed an owner prepared to invest to expand.

In 1989, sale talks with Aer Lingus, which then owned Copthorne Hotels, stumbled over price. Into the breach stepped Aer Rianta, seeking diversification opportunities as the spectre of the abolition of duty-free shopping loomed. In 1991, the airport authority bought the hotels for 12.7m.

During the 1990s, Aer Rianta built the Dublin and Cork airport hotels and extended others. But by 1999, it was buying stakes in airports and wanted to focus on that business. It wasn't to prove easy to get out, and the story isn't over yet.

Sceptics expressed concern last week that the timing of the decision to sell the hotels is unfortunate. Whatever is being said publicly, it seems highly unlikely that all will make the grade as going concerns, but staff members can be fairly sure, at the least, of compelling packages.

With partnership talks underway, and an election on the horizon, a little political deal-making will look tempting.

THE GREAT SOUTHERN EMPIRE

Killarney: Four-star, 172 rooms, built in 1854, 12.35 acre footprint, 100 full-timeequivalent staff Parknasilla: Four-star, 84 rooms, built in 1895, set on 299 acres, 63 fte staff.

Rosslare: Three-star, 100 rooms, built in 1969, on 3.7 acres, 46 fte staff Galway (Eyre Square):

Four-star, 99 rooms, built in 1855, on 0.6 acres, 84 fte staff Galway (Corrib): Four-star, 179 rooms, built in 1969, on 6.67 acres, 43 fte staff Dublin Airport: Four-star, 229 rooms, built in 1998, on 6 acres, 123 fte staff Cork Airport: Unrated, 81 rooms, built in 2001, on 5.7 acres, 46 fte staff. Proposal to extend by 60 rooms.

Derry (25% stake): Fourstar, 145 rooms, built in 2002, 79 fte staff.

Shannon Airport: Threestar, 114 rooms, built in 1963 on 6 acres, 43 fte staff