The latest trading update from Park Plaza hotels owner PPHE Hotel (PPH) showed it was feeling the benefit of several years of investment as it reported another steady uptick in revenue.
Promoted to the FTSE 250 index in June following several quarters of strong performance, the firm has again delivered decent growth.
However it appears the market may have been hoping for more. Despite opening higher, the firm’s share price is down 1.1% in mid-morning trading to £18.20.
REVPAR ON THE UP
In the three months to 30 September, like-for-like revenue per available room (RevPAR) increased 3.9% to £116.30 as the average room rate rose 3.6% to £134.10 and occupancy moved 0.2% higher to 86.8%. Total revenues jumped 5.6% to £120.2m.
RevPAR is an important industry metric that reveals how good hotels are at filling their rooms. It is calculated by multiplying the average daily room rate by the occupancy rate.
Following the steady quarter, the firm’s management has maintained guidance for its full year results.
The results reassured analysts at Berenberg, who think that over the medium term the company will ‘carry on delivering notable earnings growth, while continuing to create value through investing in its existing portfolio and new developments.’
Most of the firm’s growth came from the UK and the Netherlands, where it has renovated many of its hotels through a £300m investment programme.
INVESTMENT BENEFIT COMING THROUGH
Revenue growth was driven largely by strong increases in average room rates across several of its properties as well as good performances from its new hotel openings in London.
In Amsterdam, the other key market for PPHE besides London, the firm described its performance as ‘solid’ with revenue growth driven largely by its Park Plaza Victoria hotel.
PPHE has also boosted its presence in Croatia, where the firm said trading had ‘remained stable’ despite supply increases and stronger demand from other Mediterranean destinations.
Revenue growth in the country attributable to the performance of Arena One 99 Glamping and Arena Ka?ela Campsite properties, following a period of significant investment, was partly offset by the weaker performance of its self-catering apartment complexes.
