PPHE Hotel Group said it expects revenue for the first half of 2023 to surpass pre-Covid levels and annual earnings to beat analyst expectations due to continued strong demand.
The hospitality real estate group which develops, owns and operates hotels and resorts under brands including Park Plaza and Art'otel said revenue for the first half of the year is expected to be over £177 million, up from £155 million posted for the first half of 2019. Revenue per available room (revpar) is anticipated to be around £109, up from £93 in the first half of 2019.
PPHE stated that strong trading conditions and forward booking momentum have been maintained through the second quarter across all main market segments of leisure, corporate travel and meetings and events, adding that this demand has continued into the third quarter.
It added that the UK and The Netherlands have remained the strongest performing regions, driven by a combination of continuing rate growth and broad occupancy recovery.
Looking ahead, PPHE noted it’s now entering its strongest trading period with the onset of the summer leisure season. It added that while full year results will be hurt by elevated energy costs, it is anticipated that this effect will diminish through FY 2024 and beyond.
The company expects to deliver FY 2023 revenue of at least £400 million and EBITDA of at least £120 million, beating analyst’s revenue forecasts of between of £352.0 million to £370.0 million and EBITDA range of £106.3 million to £111.0 million.
PPHE will publish its full first half results on August 31.
Why it matters
PPHE’s performance and outlook signifies not only post-pandemic recovery but also growth from pre-pandemic levels. PPHE joins companies such as Whitbread and Dalata, both companies which have posted impressive revenue growth post-pandemic. Dalata recently said it expects first half revenue to outperform 2019 levels and Whitbread posted a significant increase in the same metric compared to years prior. However, the sector still needs to be cognizant of the effects that higher costs may have on bottom lines.
What they said
Boris Ivesha, president & CEO of PPHE Hotel Group said: “We are delighted with the strong momentum in the business during the first half which has enabled us to upgrade our outlook for the remainder of the year.
"As we enter the second half of the year, we are preparing to launch four new property concepts, scheduled to open between September 2023 and the first half of 2024. These will be exciting new propositions for our customers, including our first Radisson RED property in Belgrade, Serbia as well as three new Art’otels stretching from Zagreb to Rome and London.”