Pphe Hotel Regulatory News (PPH)

30 Jun 2008 07:00



30 June 2008

Park Plaza Hotels Limited

("Park Plaza" or "the Group")

AGM Trading Update

Mr. Eli Papouchado, Chairman of Park Plaza Hotels Limited, will provide the following trading update for the five months ended 31 May 2008, to shareholders at the Annual General Meeting to be held in Guernsey later today:

"Trading for the first five months of the year has continued to be in line with management's expectations with the majority of our hotels delivering increased market share and RevPAR either in line with or ahead of the markets in which they are located.  We have also made excellent strategic progress, announcing a number of significant transactions that are expected to take our room stock to over 13,200 by 2012, surpassing the Group's initial growth target of 10,000 rooms by 2010.

Group RevPAR for the first five months of 2008 was Euro 90 (2007: Euro 91). Like for like hotel revenue, which does not include any contribution from the Park Plaza County Hall which opened in February 2008, has remained the same compared to the same period last year. Occupancy levels decreased marginally to 77% (2007 78%), and we have made encouraging progress in driving bookings through the Brand's website through a number of successful direct internet marketing initiatives. Average room rates increased slightly.

In the UK, RevPAR was Euro 128 (2007: Euro 136) as a result of a 13% decline in the average Sterling to Euro exchange rate for the first five months of the year.  On a constant currency basis, RevPAR increased by 8%, driven by an improvement in average room rate that was significantly ahead of the London market average.

Our hotels in the Netherlands achieved RevPAR of Euro 116 (2007: Euro 107), with both occupancy and average room rates increasing.

In Germany, the market continues to be challenging. Our strategy to grow our corporate business and decrease our exposure to discounted pricing in the leisure travel market has enabled us to increase our average room rates, at the cost of a modest reduction in occupancy, and to deliver RevPAR of Euro 44 (2007: Euro 45). In Hungary with a higher occupancy and maintaining the same average rate, we managed a RevPAR growth of 10%. 

We have made good strategic progress during the first five months of the year, including the opening of the Park Plaza County Hall, the acquisition of 100% of the Park Plaza Westminster Bridge London project, franchise agreements for a Park Plaza Hotel and art'otel in Marrakech and a 50% joint venture agreement with the Reuben Brothers to build London's first art'otel in Hoxton, London.

At the end of March, we also announced the acquisition of a 20% stake in Bora, which owns approximately 74% of Arenaturist d.d., a Zagreb (Croatia) listed company, and 100% of three private companies that together own eight hotels and five apartment complexes in and around Pula on the Istrian coast of Croatia. In addition, Park Plaza will manage and operate the portfolio of properties for an initial term of 20 years. Bora intends to significantly upgrade and refurbish the hotels and apartment resorts. A number of the hotels will become part of the Park Plaza Hotels & Resorts brand and will offer accommodation and services in line with the core values of affordable luxury associated with the brand.

On 17 April, we announced that the Group had entered into an agreement with Ferens Management Limited to operate up to 20 new hotels, in Russia under 20-year management contracts. This agreement will add approximately 3,500 to 4,000 rooms to our portfolio.

Due to a change in ownership of the hotel in Doha, Global V Hospitality Inc, the franchisee for this Park Plaza Hotel project, will no longer be managing this particular hotel. Although not a significant project for the Group, the Doha hotel will not be part of our franchise network.

We are pleased with the strategic progress we have made and the performance of our hotel portfolio in the first five months of the year. However, the current economic environment has presented a number of challenges to the hospitality industry, and Park Plaza is not immune to these. Both occupancy levels and average room rates came under pressure in our markets in June, and RevPAR for the first half as a whole is expected to be affected by this. Bookings for July and the remainder of the second half are stronger than in June and continue to be in line with management's expectations, but the current uncertainty in the market means that it is still too early to draw any conclusion about performance in the second half of the year."

Enquiries:

Notes to Editors

Park Plaza Hotels Limited is owner, operator and franchisor of hotels in Europe, the Middle East and Africa. The majority of the group's hotels operate under the Park Plaza Hotels & Resorts brand (part of Carlson Hotels Worldwide), over which the Group has exclusive rights in 56 countries in EMEA or art'otel, a brand to which the Group has exclusive worldwide rights. Park Plaza Hotels also manages the luxury all-suite Plaza on the River - Club and Residence, London. 

Through it strategic partnership with Carlson, one of the world's largest travel and hospitality companies, Park Plaza Hotels has access to Carlson's powerful reservation and distribution system, airline partnerships with 19 airlines, loyalty programmes such as goldpointsplusSM for guests and Look To Book® for travel agents, and cross-selling opportunities.

There are currently 39 hotels and aparthotels and over 7,300 rooms in the Group's portfolio. By 2010, the Group's committed projects and territorial franchise agreements are expected to increase the number of rooms to over 10,000.

Projects already under development include Park Plaza Marrakech (2009), Park Plaza Nuremberg (2009), art'otel Cologne (2009), art'otel Marrakech (2009) and Park Plaza Westminster Bridge, London (2010).

Park Plaza Hotels floated on London's AIM Stock Market in July 2007.