Hospitality real estate company PPHE Hotel Group has said it will likely beat market expectations for full year revenue and profit on the back of strong leisure demand, corporate travel returning, and a bounce back in meetings and events bookings in Q4.
PPHE is going for a rate-led strategy as opposed to a volume play, and this is paying off. Average room rates in all regions exceeded levels achieved pre-pandemic. Booking momentum has continued into January.
Big openings
PPHE completed two significant openings in 2022, which it said led to heightened brand awareness in two key markets.
The first was the Grand Hotel Brioni Pula, Croatia was relaunched in May as a Radisson Collection Hotel. The second was the UK's first Art'otel, located at London Battersea Power Station, which opened in December.
PPHE currently has a £200m+ development pipeline with upcoming openings to include: Zagreb (opening Q2 2023), Rome (opening H1 2024) and London Hoxton (opening H1 2024).
Financial highlights
- Average room rate increased to £160.4 (2021: £117.0) up 24.8% on pre-pandemic levels.
- Reported RevPAR was £96.2, up 168.0% vs 2021 and at 92.8% of 2019 levels, reflecting occupancy of 60.0% (2021: 30.7%).
- PPHE said its annual independent property portfolio valuation is expected to report valuation gains, with the quicker than expected recovery in trading more than offsetting an anticipated uptick in capitalisation rates.
What they said
Boris Ivesha, CEO of PPHE Hotel Group said: "We are delighted with PPHE's outperformance in 2022. Our rate-led strategy, prime locations and highly appealing brands have continued to support our strong recovery post-pandemic, with each quarter improving on the last. The Group is now close to 2019 levels on a number of key metrics, including total room revenue and RevPAR, and with a significantly higher average room rate.
"While macroeconomic pressures remain heading into 2023, we are confident in the Group's ability to continue to grow its revenues and EBITDA. Our many exciting new hotel openings alongside further recoveries in travel and business in our key markets will continue to help us position ourselves strongly to deliver on our ambitious growth strategy."