Park Plaza and art’otel owner posts 19% revenue jump as group invests further £35m in Hoxton

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PPHE Hotel Group, owner of Park Plaza and art’otel brands has reported group hotel revenue increased by 19% for the year ending 31 December 2o17.  

In 2017, the company opened two new hotels including Park Plaza London Waterloo and Park Plaza Park Royal.

The trading update comes in advance of the group’s results for the year ended 31 December 2017, which are expected to be announced at the end of February 2018.

The group reported benefitting from improved trading across most of its operating regions and the first full year contribution of Park Plaza Nuremberg. On a like-for-like basis, group hotel revenue increased by approximately 10%.

RevPAR increased by approximately 10% to £92.9 (2016: £84.4). Average room rate increased by 8.2% to £120.2 (2016: £111.0). Occupancy increased to 77.3% (2016: 76.0%).

Like-for-like RevPAR increased by 11.5% mainly as a result of strong RevPAR growth in the group’s German and Croatian regions, alongside the continued weakening of sterling against the euro.

The trading performance for the year ended 31 December 2017 was in line with the Board’s previous expectations.

Capital restructuring during the year included the sale-and-leaseback of Park Plaza London Waterloo and refinancing of subsidiary’s debt in Croatia and Germany, raising approximately £85m in excess cash for future development and growth, and substantially lowering the interest expenses in Croatia.

The Arena subsidiary also raised €106.0 raised by way of a public offering in Croatia, funds that will be invested in renovations, upgrading the hospitality portfolio and pursuing new opportunities in Central and Eastern Europe.

An interim ordinary dividend of 11.0 pence per ordinary share (FY 2016: 21.0 pence per share) is being paid.

2017 saw the full openings of the 494-room Park Plaza London Waterloo and the 212-room Park Plaza London Park Royal, bringing 706 additional rooms into the portfolio.

And construction of the art’otel london hoxton project is expected to commence in the second quarter of 2018. This follows the announcement on 24 January 2018 (post the period end) that the group had exchanged contracts to buy from its joint venture partner its 50% interest in the development site for art’otel london hoxton, for a consideration of £35m. This acquisition will be funded through cash resources and the sale is expected to complete by the end of March 2018.

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