The European hotel group, that operates several hotels across the UK, had previously reported an increase in cancellations and a slowdown in bookings in its last trading update on 11 March.
Since then, several countries have announced “further extraordinary measures” to slow the spread of the virus. This has led to an “immediate and significant deterioration” in the hospitality market, with the group facing more cancellations and very few new bookings.
In order to significantly reduce costs, the group has now announced the potential temporary closure of approximately 2,000 rooms in London. It will also introduce a reduced capacity of hotels in Germany and Hungary, and temporarily close two hotels in Amsterdam.
The group also announced steps to reduce payroll, including reduced hours, potential reductions in FTEs and the deferral of all 2019 staff incentive payments. It will also review the timing of its investment programme until markets improve.
PPHE said that it was not possible to provide financial guidance for the FY20 financial year, given the level of “continued uncertainty” as the pandemic unfolds.
Nonetheless, the group believes that it is “well-positioned” to withstand a “significant decrease” in business activity, however, due to its “robust” financial and liquidity position, as well as its excess cash reserves and unutilised credit facilities.
Boris Ivesha, president and chief executive officer at PPHE, said: “These are unprecedented and highly uncertain times for all and the safety of our guests and team members is our number one priority.
“As we navigate through these challenging times, we are working closely with all stakeholders, from governments to local communities, from partners and suppliers to team members and our investor base.”
He added: “Our future pipeline is strong and supported by a strong balance sheet, and we remain confident about the long term appeal and value of the hospitality and travel sector.
“Our leadership team has managed through several economic cycles and we remain confident that the range of operational and financial measures announced today will help the Company weather a significant period of dislocation.”