PHE Hotel Group reports LFL RevPAR rise of 7.2%

PPHE Hotel Group has announced its trading update in advance of the Group's results for the year ended 31 December 2016, which are expected to be announced late February.

Reported group hotel revenue increased by approximately 27% year-on-year. Most of this growth was the result of the first time consolidation of the Croatian operation. Additional growth drivers were the solid performance of the UK and Germany & Hungary regions in the 2 half of the year, the opening and soft opening of new hotels and a currency exchange rate benefit. On a like-for-like basis, group hotel revenue increased by approximately 7%.

Like-for-like RevPAR increased by 7.2% to £85.4 (2015: £79.6) mainly as a result of the consolidation of the Croatian operation and the weakening of Sterling against the Euro. This RevPAR growth was achieved through an 8.6% increase in average room rate to £110.9 (2015: £102.1). Occupancy was flat at 77.0% (2015: 78.0%).

Reported Group RevPAR decreased by 8.2% to £84.4 (2015: £92.0). Average room rate increased by 1.8% to £111.0 (2015: £109.1), whilst occupancy decreased by 827 bps to 76.0% (2015: 84.3%). The decrease in occupancy is a direct result of the first time consolidation of the Croatian operation, which is a highly seasonal business heavily weighted towards the summer months.

As a result of this performance, the results for the year ended 31 December 2016 are expected to be in line with the Board's current expectations.

Hotel developments
The extension of Park Plaza London Riverbank has now been completed and following a partial opening in November 2016 of Park Plaza London Waterloo, the firm is preparing for its full opening in 2017. The soft opening of the 212-room Park Plaza London Park Royal is expected by the end of the first quarter.

Plans are being finalised to start extensive renovations in 2017 of Park Plaza Victoria Amsterdam, Park Plaza Vondelpark Amsterdam, Park Plaza Utrecht and Park Plaza Sherlock Holmes London, which will further strengthen the group's competitive position.

Boris Ivesha, President & CEO, said, '2016 has truly been a year of transition for our Group, with several new hotel openings and soft openings, debt restructuring, the acquisition of a controlling interest in our Croatian operation and the transfer of our Germany & Hungary assets under our Croatian operation which will enable us to create further shareholder value.

'Whilst trading in the early part of the year was softer than expected in some of our markets in the build up to the Brexit referendum and in the wake of various terrorist attacks, the second half of the year was more encouraging. Improved market conditions have continued into 2017 and we expect to make further progress, particularly as we benefit from our new room inventory in Nuremberg and London where our market position will be strengthened significantly.'

The 2016 like-for-like comparison figures exclude Park Plaza London Waterloo and Park Plaza Nuremberg. Furthermore, the 2015 like-for-like comparison figures include the Croatian segment apart from the first quarter of 2015 and the figures from Park Plaza Prenzlauer Berg Berlin for the second half of the year as the contract for this hotel was terminated as per 30 June 2016.

PHE Hotel Group, which together with its subsidiaries, owns, leases, develops, operates and franchises full service upscale and lifestyle hotels in major gateway cities, regional centres and select resort destinations, predominantly in Europe.