PPHE Hotel Group has reported an 18% drop in revenues to £51.4m compared with £62.5m in 2019, attributing the coronavirus pandemic to its loss.
In a trading update for the three months ended 31 March 2020, PPHE said it is “well-positioned” amid the “unprecedented challenges caused by the Covid-19 pandemic”.
PPHE also reported a decrease in occupancy to 58.5% from 76.4% in the same period last year. Revenue per available room (RevPAR) also decreased by 23.3% to £67.4 from £88.2 in 2019.
While trading during January and February was in line with board expectations, the coronavirus pandemic in Europe resulted in the temporary closures of many hotels as instructed by the government.
PPHE also revealed only one of its hotels, the Park Plaza Westminster Bridge London, remains open to key workers.
The group also described its financial liquidity position as “robust”, as at 14 April 2020, the cash position throughout the group amounts to £149.9m. In addition, the group has an undrawn overdraft facility of £3.8m.
To further protect the group’s balance sheet position and significantly reduce cash outflow during this “challenging period”, the group has taken a number of measures, which include, significantly reduce payroll, including furlough of the majority of employees in the UK and the non-renewal of fixed-term employment contracts.
Other measures introduced include, halting of contract labour, shortening of working hours and temporary progressive salary reductions, which includes a temporary 100% cut of the fees and salary respectively for the chairman of the board and the president and CEO as well as a 20% salary reduction across the executive leadership team.
Boris Ivesha, president and chief executive officer, said: “Protecting our team members has been our key priority and we continue to strictly follow all local authority safeguarding measures for those still working at our properties.
“We are actively engaging with the communities in which we operate to see how we can support them through these challenging times. We have taken decisive action to ensure the group is well-positioned to endure the unprecedented challenges that the Covid-19 pandemic presents.”
He added: “This review of operational costs has been carefully balanced with the business’ needs for the future to ensure that, as the impact of Covid-19 reduces and a sense of normality resumes, the group is well-positioned for continued success.”