PPHE reported 3.4% growth in full-year like-for-like Ebitda to £117.4m, crediting the company’s £100m refurbishment programme.
The group was due to make its first foray into the US, after buying its joint venture partner out of a project in New York, adding that it would continue to consider asset acquisitions.
Boris Ivesha, president & CEO, PPHE Hotel Group, said: "Our 2019 financial results coupled with our strategic progress once again demonstrate the strength of our unique business model, the appeal of our hospitality real estate portfolio and our rigorous focus on performance. Over the last three years we completed more than £100m asset upgrade investment projects, the continued benefit of which is being reflected in our financial performance and a significantly enhanced guest experience.
“Whilst we are closely monitoring the current uncertain macro environmental developments related to the Coronavirus outbreak and its impact on travel patterns, trading for the two months in 2020 for our group has been in line with the board's expectations.
“Our longer term outlook focuses on growth delivery through our well-invested portfolio, the delivery of our more than £300m development pipeline of new properties in London, New York and Eastern Europe and additional acquisition opportunities.”
During the year the company repositioned the Holmes Hotel London (formerly known as Park Plaza Sherlock Holmes London), Park Plaza Vondelpark, Amsterdam and Park Plaza Utrecht.
After the close of the period Arena acquired the leasehold for a site in Zagreb, Croatia, to develop and operate a 115-room hotel, as well as acquiring full ownership of the site in New York City, which was earmarked for an art'otel development.
Like-for-like revpar for the year to 31 December was up 6% to £103.6m. During the year the group had its 37-strong portfolio valued at £1.7bn, comprising primarily prime freehold and long leasehold assets in Europe.
PPHE Hotel Group's development pipeline included new hotels in London, New York, Belgrade and Zagreb, which were expected to add more than 800 rooms to the portfolio by the end of 2023.
During the year the group was included in the FTSE 250 Index, with chairman Eli Papouchado adding: “As we continue to grow in size and stature, we recognise the need to further strengthen our financial reporting, corporate communications and our governance, whilst staying true to our entrepreneurial roots.
“As an owner operator with extensive development expertise we take a different approach to many of the large global hotel companies, by choosing to operate across the whole value chain.
“We are continuously seeking out and evaluating new property opportunities, as well as refurbishing and repositioning our existing assets. With our expertise in development we are able to marry this with the aspirations to create new opportunities. Our owner operator business model enables us to enhance value through driving the business and gives us greater scope to maintain all our assets to the level required to achieve our aspirations of maximising operational revenue. Furthermore, we have the asset backing to refinance and recycle capital to fund further investments and facilitate future growth.
“We own most of the properties we operate, which gives us greater control over our investment strategy, the quality of our products and our operations.
“Control enables us to make swift investment decisions and seize opportunities as they arise, as well as capturing all of the economic upside. By regularly investing in our existing diverse portfolio we maintain a high quality estate which increases the value of our portfolio of assets.”
Insight: The owner operator model is one which divides the sector. Is it horribly out of touch or is it the smart way to control all aspects of the business and remain nimble at the same time? One thing is certain, if you go around telling people that your portfolio is worth £1.7bn, you’re going to get slavering brokers knocking at your door eager to come up with ideas as to how to split it up and bonuses for all.
PPHE has enjoyed a number of different financing routes over the years. It has access to the markets but it has also been a very successful supporter of ground leases, giving the pension funds and other institutions access to stable long-term income with the help of its solid covenants and with it gaining the reputation for steady sobriety itself. Not the mark of a company which is planning a sudden sale.
So on with the plan, which continues to be to build an enviable portfolio, including in the hard-to-crack Croatia. When the time comes, there should be no shortage of buyers.