PPHE revenue rises as hotel markets normalise

25th Apr 2024 07:03

(Sharecast News) - PPHE Hotel Group reported first-quarter revenue of £77m in an update on Thursday, marking an impressive 11.9% year-on-year increase.

The FTSE 250 company put the growth down to rising occupancy rates across leisure, corporate, and meetings and events segments, alongside an expansion in operational days in its Croatian portfolio, notably at Grand Hotel Brioni, and the beneficial impact of the leap year across all markets.

Demand remained solid in key markets such as the UK, the Netherlands, and Germany, with encouraging signs of early summer season activity in Croatia.

Revenue per available room (RevPAR) stood at £98.1, up 1.9% from the first quarter of 2023, and on a like-for-like basis, RevPAR reached £99.4, ahead 3.3%.

Occupancy levels continued to strengthen, with like-for-like occupancy reaching 71.3%, compared to 66.9% in the first quarter of 2023.

Average room rates settled at £139.3, aligning with expected normalisation trends.

Strategically, the group's extensive £300m+ development pipeline was nearing completion, with the highly anticipated 357-room Art'otel London Hoxton undergoing a successful soft opening in line with plans.

Strong customer interest and booking activity was expected to escalate during the phased opening period.

Progress continues on the Art'otel Rome Piazza Sallustio, scheduled for opening in the coming months.

Encouraging initial trading was reported at recently-opened properties such as Art'otel Zagreb in Croatia and Radisson RED Belgrade in Serbia.

Those additions were expected to contribute at least £25m of incremental EBITDA on stabilisation.

Summer bookings were underway for the repositioned Radisson RED Berlin Kudamm, strategically timed to leverage high demand ahead of the UEFA European Championship.

Opportunities within the longer-term pipeline, including the 179-room subterranean property at Park Plaza Hotel London Victoria, were meanwhile being pursued.

Planning processes were underway for multiple sites in London and overseas, supported by the ongoing partnership with Radisson Hotel Group.

Greg Hegarty's appointment as co-CEO in February strengthened the leadership team, focusing on operational management and long-term strategic planning.

Looking ahead, PPHE said booking activity remained robust, mirroring 2023 levels, with the imminent start of Croatia's summer season and increased demand for meetings and events providing further visibility across geographies.

Progress was expected in rebuilding occupancy levels while maintaining rate integrity and maximising profitability.

Pipeline assets were steadily contributing to EBITDA growth, in line with expectations.

The board said it was confident in achieving a full-year performance aligned with market expectations.

"We are pleased with our progress over the first three months of our new financial year in what is always a quieter period," said president and chief executive officer Boris Ivesha.

"We have achieved further growth in our top-line performance and RevPAR, as we continue to see increasing occupancy.

"The progress with our £300m+ development pipeline continues at pace, and the soft opening of our new Art'otel London Hoxton was a momentous occasion for the group."

Ivesha said the firm's accretive pipeline nearing completion afforded it confidence as it moved through the year and into the busy summer season.

"While still early in the year, leisure trends remain supportive and interest in our brands and assets in key European capital cities continues to support our confidence in our future prospects."

At 0847 BST, PPHE Hotel Group shares were down 1.89% at 1,466.75p.

Reporting by Josh White for Sharecast.com.