PPHE revenues soar 71% in Q3

PPHE Hotel Group has seen its revenues soar by 71.1% to £129.6m in Q3 as it welcomed strong trading throughout the quarter, particularly in the London summer season. In the quarter ended 30 September 2022, the average room rate increased to £175.0, up 50.5% vs Q3 2021, and up 30.5% on pre-pandemic Q3 2019 levels. The group claimed its rate-led strategy means it can continue to “better navigate inflationary pressures”. Its London assets delivered a very strong quarter in particular, with July and September witnessing “unusually elevated” demand. On a headline basis, average room rates in London for the quarter were up 33.3% vs Q3 2019. Over the period, good progress was made on its £200m development pipeline, with all development works progressing in line with plans, including London Hoxton (opening H1 2024), Zagreb (opening Q2 2023) and Rome (opening H2 2023). In addition, works on art’otel London Battersea Power Station, which will be operated by PPHE under a management agreement through its hospitality platform, are nearing completion. The group noted that the strong demand and forward booking momentum seen in Q3 has continued into Q4 2022, while the group is seeing increasing numbers of bookings from corporate travel and the meetings and events segment. In light of the “unusually elevated” demand for the group’s London properties in July and September, coupled with continued strong demand and booking momentum into Q4, PPHE said it is on track to exceed market expectations for revenue and EBITDA in FY22. Looking ahead, PPHE compiled analyst consensus forecast range for the year ended 31 December 2022 shows a total revenue of £255.8m - £301.0m and EBITDA of £79.2m - £85.6m. It noted that whilst macroeconomic challenges and inflationary pressures remain, particularly around the elevated cost of energy, its investments made in technology, automation and energy efficiency, alongside the rate-led strategy, remain “key to mitigating industry-wide cost pressures”. Boris Ivesha, president and CEO of PPHE Hotel Group said: “We are extremely pleased with our continued strong trading performance despite well-documented macroeconomic challenges, perfectly reflecting our successful rates-led growth strategy. “Our Q3 performance is now at levels above those pre-pandemic. Occupancy continues to rebuild as travel returns, but our steadfast focus on rates means we are not wholly reliant on high occupancy to generate attractive returns.” He added: “We have also continued to progress our development pipeline and remain excited about the prospects for our upcoming new hotel openings. While macroeconomic pressures continue to impact our industry, we remain confident about the Group’s ability to grow revenues and EBITDA through its rate-led strategy.”