PPHE Hotel slumps to first-half loss on Covid-19 closures
Hotel and resorts group PPHE slumped to a first-half loss as coronavirus lockdowns hammed revenues during the second quarter as it was forced it to close properties at the height of the pandemic.
The company on Thursday reported a core loss of £3.3m compared with a profit of £45.7m as revenue plunged by two thirds to £61.9m in the six months to June 30. Reported pre-tax losses were £40.7m against a profit of £4.3m in 2019.
Occupancy fell to 34.7% compared with 76.8% a year earlier, while the average room rate fell 7.9% lower to £112. Revenue per available room, a key measure in the industry, fell 58.3% to £39. In the second quarter RevPAR fell 89.6% to £10 as total revenue was almost wiped out, crashing 89% to £10.4m.
PPHE said it reopened most of its properties in July, “albeit many continue to operate with limited services due to social distancing guidelines” and was currently operating 84% of its 45 properties across Europe.
It added that first segment to return was domestic leisure travel or travel from surrounding countries, with strong weekend demand experienced in Amsterdam and London in particular as flagship hotels hits occupancy levels of 80%-90% on weekends.
“The period of reopening for the group coincided with the leisure season and as a result, visibility on the recovery of the business travel segment is more limited. To fully capitalise on leisure demand, the group entered into an exclusive partnership with Merlin Entertainments, offering guests attractive package options,” the company said.
“Due to the sudden impact that lockdowns, quarantine measures and restrictions may have, customers tend to make last minute buying decisions, typically giving preference to flexible booking conditions.”
PPHE Hotel said that its first-half performance reflected a 'dramatic downturn in activity' in the second quarter, as property closures and reduced capacity led to second quarter total revenue decreasing 88.8%.
President and chief executive Boris Ivesha said: “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.”