London hotel sales buoyed by collapse of pound, says PPHE
The collapse of sterling has boosted London hotel sales as UK holidaymakers were put off travelling abroad by soaring exchange rates, PPHE Hotel Group said.
The FTSE 250 group, which runs Park Plaza and Art’otel sites, said its 38 London locations saw strong sales during the first half of the year driven by domestic holidaymakers.
Like-for-like revenues jumped by 6.3% to £155.2 million in the six months to June 30.
PPHE said its UK portfolio drove sales growth with a “solid operating performance”, while sites in the Netherlands also performed well.
Daniel Kos, chief financial officer of the company, told the PA news agency that growth in revenue was driven by UK holidaymakers avoiding rising prices elsewhere in Europe.
He said: “Domestic demand has driven growth in the UK, but the pound could also be a factor for the demand we have seen from overseas.”
He added that the company’s growth was also boosted by investment in its London sites, and it was eyeing up more UK locations as part of an acquisition strategy.
PPHE is set to pump £300 million of investment into sites including its 27,000 square metre Art’otel in Hoxton, east London.
The company, which regularly welcomes MPs to its Park Plaza hotel opposite the Houses of Parliament, also called for the Government to secure a Brexit solution which protects freedom of movement.
Mr Kos said: “Freedom of movement is particularly important to our industry. We know we would not be able to serve our customers without EU workers.
“Of our 2,500 workers in the UK, about 1,500 are from the EU. I have workers say how slow and difficult it can be to sort their paperwork, so we want that to be resolved as soon as possible.”
The hotel group increased earnings for the period by 12.5% to £45.7 million but saw reported pre-tax profits slip by 73% to £4.3 million after a one-off revaluation.
Boris Ivesha, president and chief executive officer of PPHE, said: “Our real estate investment programme has progressed well, and we are delighted with the completion of several significant repositioning projects which have transformed our portfolio.
“PPHE’s proven development strategy is to target real estate in prime locations and attractive geographies where we believe there is significant upside potential to drive growth and long-term value through both the property portfolio and operations.”
Shares in the company dipped 2.3% to 1,700p after morning trading.