(Alliance News) - PPHE Hotel Group Ltd on Thursday reported a loss in the first half as the hotel operator faced "unprecedented challenges unlike anything the hospitality industry has seen before".
For the six months to June 30, PPHE swung to a pretax loss of GBP40.7 million from a profit of GBP4.3 million the year before, as revenue fell 60% to GBP61.9 million from GBP155.3 million last year.
PPHE Hotel Group said trading was significantly impacted by the coronavirus outbreak from March which resulted in reduced customer demand and property closures, but noted it outperformed the market in January and February.
Revenue per available room - a key metric in the hospitality industry - declined by 58% to GBP38.9 from GBP93.4, with occupancy declining to 35% compared with 77% in the first half of 2019.
As a result, room revenue dropped 64% year on year to GBP39.5 million, with average room rate at GBP112.0 from GBP121.7.
PPHE said it is currently operating 84% of its 45 properties across Europe, and boasted its flagship properties in London and Amsterdam are "outperforming the market".
"The first half of the year has brought unprecedented challenges unlike anything the hospitality industry has seen before. In the face of these difficulties, the Group has shown its ability to adapt to the new environment, supported by the high quality of our portfolio, our flexible owner operator model and broad customer appeal," Chief Executive Boris Ivesha said.
Ivesha continued: "I am delighted that the majority of our properties are safely welcoming customers once again, and I am encouraged by the strong leisure demand and resulting market outperformance we have seen in our flagship properties in London and Amsterdam. Looking ahead, we are focused on maintaining this positive momentum and ensuring that the group is well-positioned to navigate the ever-evolving trading environment and to capitalise on future opportunities in line with our growth strategy."
PPHE is not proposing an interim dividend, given the uncertainty caused by the pandemic. The hotel operator said its ongoing restructuring programme will "ensure" its operational structure is "fit for purpose and is aligned with guest demand for the short and medium term" PPHE said.
Since reopening, PPHE noted that the first segment to return is domestic leisure travel or travel from surrounding countries, with strong weekend demand experienced in Amsterdam and London in particular with its flagship hotels reaching occupancy levels of 80%-90% on weekends.
The company was unable to offer any "meaningful" guidance for the current financial year.
Ivesha added: "Looking ahead, we are focused on maintaining this positive momentum and ensuring that the group is well-positioned to navigate the ever-evolving trading environment and to capitalise on future opportunities in line with our growth strategy."
Shares in PPHE Hotel Group were 2.3% higher in London on Thursday morning at 1,074.00 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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