AGM Trading Update

RNS Number : 6738T

Park Plaza Hotels Limited

10 June 2009

 



10 June 2009

Park Plaza Hotels Limited

('Park Plaza' or 'the Group')

AGM Trading Update

Mr. Boris Ivesha, CEO and President of Park Plaza Hotels Limited, will provide the following trading update for the five months ended 31 May 2009, to shareholders at the Annual General Meeting to be held in Guernsey later today:

'As highlighted in our Preliminary Results, announced in March, trading conditions since the beginning of the year have remained difficult in our markets and we continue to anticipate that 2009 will be a very challenging year for us and the industry as a whole.  

Against this backdrop, the Board is pleased to report that the Group's trading for the five months to the end of May is in line with management's expectations, with RevPAR at our hotels in the United Kingdom and the Netherlands continuing to outperform their local markets.   

Group RevPAR for the five months to the end of May was €73.3 (2008: €90.2)  This is reflective of trading conditions in all the Group's markets and the impact of Sterling devaluation that affects 40% of the Group's hotel revenue.  Group hotel revenue for the five months was €29.1 million (2008: €34.4 million).  Whilst Group occupancy rates have reduced only very slightly to 75.3% (2008: 76.6%), which is an impressive performance given the economic environment, overall average room rates have been more severely affected at €97.3 for the period (2008: €117.8).

In the UK, RevPAR, on a constant currency basis, was £95.6 (2008: £100.9).  On a reported basis, RevPAR was €107.1 (2008: €130.3).  Occupancy rates are flat at 83.1% (2008: 82.6%), which is also very high, given both the market environment and a comparison with previous downturns. Average room rate has, however, reduced to €128.8 (2008: €157.7) although on a constant currency basis it was £114.9 (2008: £122.2).  Reflecting the difficult trading environment, underlying conferencing and banqueting revenue has also declined, although by less than average room rates.

As in the UK, the Group's hotels in the Netherlands continue to outperform the market.  Amsterdam has been one of the worst affected hotel markets in Europe with occupancy rates of 64.1% for the four months to April (source: TRI Hospitality Consulting April 2009).   Against this background, we have been successful in maintaining a very high level of occupancy. For the five months to the end of May, occupancy rates at our hotels were 83.4% (2008: 87.1%).  Average room rates for the five months were €106.7 (2008: €129.7)

In Germany and Hungary, RevPAR for the five months to the end of May was €38.1 (2008: €46.1). As in our other markets, occupancy has held up well at 64.5% (2008: 65.9%) whilst average room rates decreased to €59 (2008: €69).  

  The Group's management and holdings operation continue to perform in line with our expectations.

Our discussions with lenders regarding the refinancing of the Group's €42.3 million banking facility for three owned/co-owned Dutch properties are progressing well. This facility matures in September 2009 and a further update will be provided as appropriate.  

Notwithstanding the difficult trading environment, we have continued to progress our development pipeline, with the art'otel and Park Plaza in Marrakech and the art'otel cologne currently on track for 2009 openings. These hotels will add a further 404 rooms to the Group's portfolio.  In April, we were pleased to announce the signing of an agreement with Bank Hapoalim to increase the existing £221 million facility for construction of the prestigious Park Plaza Westminster Bridge London project, to £248 million. The loan now covers the total project development cost. This project is running on schedule and to budget for its opening in the first half of 2010.  This apart-hotel with over 1,000 rooms will be one of the largest hotel openings in the UK for 40 years.

Given the very difficult trading environment, the Group is satisfied with its performance in 2009 to date.  Although visibility has improved only     very slightly as we reach the half year, the general economic uncertainty that continues to affect our markets and the importance of the second half, mean it is still too early in the year to draw any firm conclusions about the remainder of the year. Nonetheless, we continue to believe that our experience in managing through these types of markets, the quality of our portfolio and our strategic relationship with Carlson leave the Group with a strong basis from which to continue developing the business.' 

Enquiries:

Park Plaza Hotels
Chen Moravsky, CFO	Tel: [phone]
Hudson Sandler	Tel: [phone]
Jessica Rouleau / Wendy Baker

 

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