PPHE Hotel Group revenue rises, margins under pressure

(Sharecast News) - PPHE Hotel Group reported a rise in revenue for the first half of 2025 on Thursday, but flagged margin pressures from normalising room rates and higher costs, as it continued to expand its hotel portfolio and development pipeline. The FTSE 250 hospitality real estate group posted a 4.7% increase in total revenue to £199.9m in the six months ended 30 June, with like-for-like revenue up 1.3% at £193.3m.

Reported revenue per available room (RevPAR) rose 1.4% to £109.3, reflecting improved occupancy levels, although average room rates softened as travel patterns normalised.

EBITDA fell 5.7% to £45.5m, with the group citing new hotel opening losses, wage inflation and higher social security costs, partly offset by efficiency measures.

Adjusted EPRA earnings per share over the past 12 months slipped 4.8% to 119p, while EPRA NRV per share rose 2% to £28.07. The board approved an interim dividend of 17p per share.

"In the first half, we increased our occupancy levels whilst proactively managing room rate in an industry which continues to be impacted by the volatile macroeconomic and geopolitical environment," said co-chief executive Greg Hegarty.

He added that deliberate decisions to delay the ramp-up of some properties, including Art'otel London Hoxton, aimed to "maximise the long-term financial potential" rather than prioritise short-term returns.

The group said it strengthened its portfolio with acquisitions including a City of London development site for £17.5m, earmarked for its first Radisson RED hotel, and the freehold of its Park Royal hotel and development site for £10m.

It also increased its stake in Arena Hospitality Group to 65.5% through a €18.5m share purchase.

Looking ahead, PPHE said occupancy trends remained stable and summer trading in Croatia was strong, but reiterated that EBITDA for the year was expected to be broadly in line with 2024 levels given cost pressures and the phased opening of the Hoxton property.

The board reaffirmed that newly-opened hotels were on track to contribute at least £25m of incremental EBITDA upon stabilisation.

At 0926 BST, shares in PPHE Hotel Group were down 11.09% t 1,42.73p.

Reporting by Josh White for Sharecast.com.