PPHE hotels boss: ‘The UK is a growth market for hospitality'
The boss of PPHE Hotel Group has revealed the company is poised for further UK expansion, with four London openings in the pipeline.
Speaking to The Caterer, co-chief executive Greg Hegarty said the group was "passionate" about the UK, which remains PPHE's largest region in terms of revenue.
In April, PPHE will soft-launch its second Art'otel property (pictured), the 357-bedroom Art'otel London Hoxton. It will feature a panoramic events space and 5,900 m2 of co-working space from October onwards.
The group has also secured planning permission for a site on the A40 in Park Royal, as well as a 179-bedroom subterranean hotel beneath the existing Park Plaza Victoria London.
Hegarty said the pandemic pushed PPHE to "derisk the business" by investing in a "multi-brand approach", instead of relying solely on its upper upscale, full-service model.
He said the team were also keen to introduce an affordable hotel in a "gateway location" like Victoria, which has seen a "significant amount of development" of new offices and government facilities.
PPHE is also in the process of securing planning permission for another 179-bedroom hotel in Westminster Bridge Road, which will operate under the same brand concept as Park Plaza Victoria London.
The Westminster Bridge property had previously been approved by planning officers but was rejected by local councillors.
"Once we've got Westminster Bridge Road over the road so to speak, because we're in appeal, we'll look for growth elsewhere," Hegarty said.
"There are new development opportunities in London, but getting the planning permission to develop in the capital is becoming business prohibitive."
Positive results
Despite these challenges, Hegarty said the UK remains a "growth market for hospitality". This was reflected in PPHE's full-year results for the region, which was boosted by a strong demand for leisure, corporate travel and meeting and events.
The King's Coronation in May 2023 supported Q2 performance, where average room rate grew by 14.8% versus Q2 2022 and 35.6% versus Q2 2019.
Across the board, PPHE Hotel Group reported record EBITDA growth of 35.5% to £128.2m compared to 2022, while revenue per available room (RevPAR) rose 25% to £120.70.
The group said occupancy continued to rise, with rates at 72.4% compared to 60.0% the previous year.
Hegarty said this was boosted by PPHE's decision to "insource housekeeping" post-Brexit, which meant it could mobilise its staff "as soon as we saw demand".
Rates in London were also supported by the increase in the average length of stay from corporate customers, which has more than doubled to an average of 2.1 days per week.
"UK domestic workers who are remote and come into London are opting for a longer stay," said Hegarty.
"We have the bleisure impact for sure; it's a hot topic at the moment, where you've got people coming for meetings on Thursday and staying over for the weekend. But predominantly, midweek length of stay is increasing across the business."
PPHE Hotel Group is a hospitality real estate company with a £2b portfolio.
