The publicly-quoted hotels group Dalata, which recently raised €160m in new equity capital to invest in buying existing or building new hotels in Ireland, is in discussions to buy as many as seven sites in central Dublin to build new hotels.

Speaking after an extraordinary general meeting of the company yesterday, Chief Executive Pat McCann said there was strong competition for the sites from office and residential developers and that Dalata ultimately would be lucky to get one or two of the sites under discussion.

"Somebody will have to be prepared to do this, so it might as well be us," he said.

The chief executive signalled that the company would also look closely at acquiring a number of hotel properties which will soon come on the market such as the Gresham and Gibson Hotels in Dublin and the Clarion in Sligo.

Mr McCann has indicated that Dalata has €160m in fresh equity capital to invest in buying existing, or building new hotels in Ireland.

He also warned against a VAT increase on hotels and restaurants in next week's Budget - saying that the current 9% rate had helped to create 30,000 jobs in the hospitality sector.