Investors watching the UK hospitality sector will note that PPHE Group is pressing ahead despite a stalled takeover by Fattal Hotel Group. The FTSE 250 hotel operator said the failed transaction will not divert it from its core strategy of delivering operational gains and simplifying its balance sheet.
The board, which had supported the sale, said opposition from a major shareholder ended the strategic review in July without a buyer. In the six months to June, the group posted a pre‑tax profit of £135 million, a sharp rise from a £10 million loss a year earlier, while revenue per room grew 3.9 percent.
Growth was driven largely by strong performance at its UK hotels and a favourable euro‑to‑sterling exchange rate. However, the company warned that recent hikes in business rates are weighing on earnings. The average rates bill for a UK hotel has risen by about £28,900 this year, and the government has appointed a "business rates guru" to review the calculation method.
PPHE also highlighted external pressures such as the conflict in the Middle East, which has shortened booking windows and reduced forward‑booking visibility. The group's balance‑sheet actions include a £147.9 million purchase of the freehold for its Park Plaza hotel in Waterloo, a move that boosted reported profit.
Earlier this year, the company sold a development site in Manhattan to a US‑based real‑estate developer for $33.5 million, a reminder that cross‑border investors keep an eye on UK hotel assets. The firm's message is clear: it will continue to maximise shareholder value through operational delivery while navigating a tougher tax environment.