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1、PPHE HOTEL GROUPANNUAL REPORT AND ACCOUNTS 2021C O N N E C T I N G O P P O R T U N I T I E SHighlightsBusiness highlights The Groups attractive locations and quality and depth of its portfolio have enabled it to outperform when restrictions were eased Successfully secured contracted business in time
2、s ofuncertainty and volatility,including government and essential travel contracts and serving as the host hotelfor the players and support teams of theWimbledon Championships Winner of The Caterers 2021 Best Employer in Hospitality Award Raised 125.8 million of cash to pursue new growth opportuniti
3、es by entering intoa joint venture partnership on two of our London properties Progressed our 200m+development pipeline and repositioning projects and acquired hotels in Austria(Nassfeld)and Italy(Rome)Looking ahead at 2022 with confidence in demand for travel and excitement forour several new(re)op
4、eningsFinancial KPIs1Operating KPIs1Responsible Business Total revenue 141.4m2020:101.8mAdjusted EPRA EPS(44)p2020:(123)pEBITDA 25.1m2020:(10.1)mOccupancy30.7%2020:28.0%Average room rate117.02020:105.1RevPAR35.92020:29.4 Linking development tolearning Attracting and retainingtalent Increasing divers
5、ity in the workplace Increasing our charity initiatives and volunteering Contributing to and investing in our localcommunity Reducing our carbon footprint Conserving water Recycling more and reducingwaste Increasing the use of ethically sourced and eco-friendly materials Normalised profit before tax
6、(47.5)m2020:(89.8)mProperty value1.8bn2020:1.7bnEPRA NRV per share22.152020:22.08Learn more see our Business reviewOur visionTo deliver a best-in-class performance through building further scale and depth inour real estate portfolio and growing theplatform with our integrated Buy,Build,Operate model
7、.Who we areWe are an international hospitality group with astrongprimerealestate portfolio consisting of48propertiesunder operation in eight countries,thattransformsan assets potential into value and profits.What we doWe have a clear strategy to drive growthandcreatelong-termvalue while recognising
8、and developing opportunities to help our assets reach their full potential.We delight our guests every day,throughengaging service and qualityproducts ininviting places.How we do it By valuing our people,being led byanentrepreneurial Executive LeadershipTeamandthrough investing inourportfolio,opport
9、unities with upside potential and local communities.Our purposeCreating valuable memories for our guests and value for our assets,people and local communities.1.Details of Alternative Performance Measures(APMs)can be found in the APM glossary on page 209.Our PeopleOur PlacesOur PlanetLearn more See
10、our Responsible Business strategy on pages 74 to 89.HOLMES HOTEL LONDONSTRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTS3APPENDICESStrategic Report6 About us:creating value7 Our investment case10 At a glance16 Chairmans statement18 President and CEOs review22 Business model24 Strategy at a gl
11、ance26 Our approach to risk management35 Viability statement36 Key performance indicators38 The traveller in 202240 Award-winning hospitality management platform42 Our pipeline44 Financial review58 Business review68 Stakeholder engagement74 Responsible business87 TCFD reporting A new way to engageCo
12、rporate Governance90 Introduction to governance94 Board of Directors96 Executive Leadership Team98 Corporate Governance109 Nomination Committee report115 Audit Committee report121 Remuneration report 131 Directors reportFinancial statements136 Independent auditors report140 Consolidated statement of
13、financialposition141 Consolidated income statement142 Consolidated statement of comprehensive income143 Consolidated statement of changes inequity144 Consolidated statement of cash flows146 Notes to consolidated financial statementsAppendices204 Subsidiaries included intheGroup207 Jointly controlled
14、 entities207 Current and pipeline projects208 Glossary209 APM glossary210 ContactsContentsAWARD-WINNING HOSPITALITY MANAGEMENT PLATFORMPAGE 40OUR BRANDSPAGE 12ARTOTEL LONDON HOXTONPAGE 61GATEWAY CITIESPAGE 11PRESIDENT AND CEOSREVIEWPAGE 20OUR BUSINESS MODELPAGE 22OUR PIPELINEPAGE 42STRATEGIC REPORTC
15、ORPORATE GOVERNANCEFINANCIAL STATEMENTS45ANNUAL REPORT AND ACCOUNTS 2021PPHE HOTEL GROUPAPPENDICESWe create memorable guest experiences by owning,developing and operating hotels and resorts in dynamic,vibrant cities and leisure destinations.Our properties are managed by experienced teams living our
16、values every day,creating unique experiences.We create stakeholdervalue at every step of the value chainasour properties provide attractive returnsand long-termcapital appreciation.Our investment caseFull value chain approachValue creation through development,repositioning,operations and brand owner
17、ship and access;resulting in a 30-year track record of NAV growth and industry-leading EBITDA marginsSources of fundingAsset backing used as source of funding,all growth post 2007 IPO realised without diluting shareholdersDiversified portfolio in key cities and leisurelocationsNew and renovated prop
18、erty portfolio of 48 prime assets in operation;consisting of hotels,resorts and campsitesPlanned capex in active pipeline of 200m+Attractive projects in London,Pula,Zagreb and RomeIndependent operator with brand flexibilityIntegrated owner/operator model with access to global brands,distribution and
19、 marketingTrack record of successfully managing through the cyclesExperienced developers and operators,with 35 year track record of managing through economic cyclesSTRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTS67ANNUAL REPORT AND ACCOUNTS 2021PPHE HOTEL GROUPAPPENDICESSecure best locations
20、 and control over all aspects of the hotel designValue gains through development and repositioningAligned interestsRental income and value appreciationEnsure consistency of brand standards and guest service levels are maintained throughout the estateManagement agreement to earn a fee-based income as
21、 a%of revenue and profitAsset operated underoperational leaseagreementAsset owner and leased to,or managed by a third partyOptimise timing to refurbish and reposition(Re)finance with asset backing to extract valueSale of assetFranchise agreement(or the usage of a brand,income as a%of revenue)Reinves
22、t extracted cash to enable further growthNet operating profit from rooms,food&beverageFee-based income as a%of revenue and profitValue gainsSource for funding future growthPPHE HOTEL GROUPBUSINESS MODEL BENEFITSSHAREHOLDER VALUE PROPOSITIONTYPICAL ASSET-LIGHT MODEL ADOPTED BY LARGE HOTEL GROUPSTYPIC
23、AL ASSET-HEAVY MODELOTHER HOTEL OPERATORSTOTAL VALUE CHAINSite acquisitionAsset managementHotel ownershipHotel operationHotel managementBrandDevelopment/repositioningExtracting valueReinvestment/cash recyclingWe have three strategic blocks which are supported by PPHEs pillars and enablers to achieve
24、 our visionOperating across the value chainPPHE Hotel Group operates a highly differentiated business model to peers,who are increasingly focused on either the property or operational aspects of the hotel value chain.With in-house expertise across the value chain,PPHE is able to control all aspects
25、of its guest offering,while retaining all of the economic upside.Bycontrast,those offering either an asset-light or asset-heavy model relinquish some control of the guest experience,as well as pay away fees tothird parties.We have a framework for our future strategy which is built across a series of
26、 distinctive strategic blocks,underpinned by PPHEs pillars and enablersTo deliver a best-in-class performance through building further scale and depth in our real estate portfolio and growing the platform with our integrated Buy,Build,Operate model.BUSINESS MODELOUR VISIONSTRATEGIC BLOCKSPPHE PILLAR
27、S AND ENABLERSCore,upper upscale,city centre hotelsLeisure and outdoorhospitalityHospitality management platformRestaurants and barsDiversification of property portfolioNon-dilutive capital approachPeople and cultureGuest satisfactionESGLearn more see pages 22 and 23PPHEs offerSTRATEGIC REPORTCORPOR
28、ATE GOVERNANCEFINANCIAL STATEMENTS89ANNUAL REPORT AND ACCOUNTS 2021PPHE HOTEL GROUPAPPENDICESREAL ESTATE213m932m274m87m253mUnited KingdomThe NetherlandsGermanyCroatiaOtherUnder development250m410677United Kingdom 10 hotels,3,681 roomsThe Netherlands 6 hotels,1,073 roomsGermany 7 hotels,1,106 roomsCr
29、oatia 7 hotels,6 resorts,2,769 roomsOther 4 hotels,498 rooms2355Freehold 23 hotels 7 resorts 6,527 roomsLong leasehold 5 hotels 1,590 roomsManaged,operated,leased or franchised5 hotels 1,010 roomsWe are an integrated hospitality realestate group with a 1.8bn portfolio of primarily prime freehold and
30、 long-leasehold assets in EuropeValue split by geography1(Excludes managed,operated,leased,franchised and unconsolidated hotels)Hotels and resorts by geography(Includes franchises,excludes campsites and pipeline)Hotels and resorts by ownership type(Includes franchises,excludes campsites)at a glanceC
31、ountries8Total rooms 9,100Total properties 48Campsite pitches 5,800Gateway citiesLondonWith a portfolio of seven hotels and approximately 3,200 rooms in operation andanother 1,100 rooms at various stages ofdevelopment,the UKs capital is the Groups most important single market.FromLondons highly popu
32、lar South Bank to urbanchic Marylebone,from hipster Hoxton to thewell-connected Victoria and Park Royal areas,our hotels are located in highly desirable and easily accessible locations.RomeWe are thrilled to be entering Italy,with our acquisition in 2021 of the historic Londra&Cargill hotel in the c
33、entre of Rome.Located near Via Veneto and within walking distance of some ofRomes main attractions,this hotel will be completely transformed and will become the firstartotel in Italy.AmsterdamOur portfolio in the Dutch capital is strong with three hotels in the city centre and one hotel located near
34、 Amsterdam Airport.Ourportfolio includes Park Plaza Victoria Amsterdam,which is located opposite the main train station and is arguably one of the best-known hotels in The Netherlands due toits rich history,and its bold,colourful andartistic neighbour,the award-winning artotel Amsterdam.PulaPula,hom
35、e to Istrias main international airport,serves each year as the starting pointfor many holidaymakers.Pula is a popular leisure destination and is not only steeped in Roman history,it provides easy access to historic sites,pristine nature and anappealing coastline.Our portfolio inand around Pula incl
36、udes 21 properties,from campsites to luxury glamping and from self-catering apartments to premium full-service resorts.BerlinWe have four hotels in the buzzing German capital,including two properties in the former East Berlin(Mitte),close to the Brandenburg Gate,Tiergarten,Museum Island and cafs and
37、shops.Our other twohotels are located inthe west of the city near the famous Kurfrstendamm,which is often considered theChamps-lyses of Berlin and islined withshops and restaurants.ZagrebWith our strong presence in and around Pula,we were keen to secure a property in the Croatian capital and further
38、 build our property portfolio inkey capital cities in the Central and Eastern Europe(CEE)region,adding to our hotels in Belgrade and Budapest.We are currently converting aformer office building in the heart of Zagrebinto the countrys first artotel.BudapestOne of Eastern Europes first design hotels w
39、hen it first opened,our artotel Budapest is located on the banks of the Danube providing stunning views and easy access to the citys main attractions.The building combines several historic former fishermens houses with a new frontage.During 2022 the hotel will undergo an extensive renovation program
40、me,aligning its offering with the new generation artotels.1 The fair values were determined on the basis of independent external valuations prepared in December 20212 Properties under development include:New York,artotel London Hoxton(London),Westminster Bridge Road(London),Hotel Brioni(Pula)and Zag
41、rebSTRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTS1011ANNUAL REPORT AND ACCOUNTS 2021PPHE HOTEL GROUPAPPENDICESOur brandsHOTELS CAPITAL CITIES/SECONDARY CITIES/CITY CENTREHOTELS CAPITAL CITIES/SECONDARY CITIES/CITY CENTREartotel London HoxtonartotelA place to dream and be inspired,artotel i
42、s a hotel like no other.A contemporary collection of upper upscale,lifestyle hotels,each inspired by a signature artist,forming acultural,gastronomic and social hub in the most creative areas of the most interesting cities attracting international,domestic and localguests.The artartotel is an arts a
43、nd premium lifestyle hotel devoted to creating and presenting original work.Unlike hotels with dcor art,artotel invites guests to create art,to interact with and immerse themselves in art,not just to view.The artotel experience:Each artotel is inspired by a dedicated signature artist.Interactive art
44、 discovery programme with contemporary art,frequent exhibitions and hosted art tours for creative escapists.Rich,art-led events programme celebrating arts,fashion and music forcultural explorers.New developmentsartotel has several exciting new developments in its pipeline,including twoflagship devel
45、opments in London.artotel London Battersea Power Station isexpected to open in 2022 and artotel London Hoxton in 2024.Plans are also advanced to convert hotels in Rome,Zagreb and Pula.Signature artists for these developments are yet to be revealed.Be bold.Be creative.Be Park PlazaAn upper upscale,co
46、ntemporary hotel brand featuring individually designed hotels in vibrant city-centre locations and select resort destinations.Renowned for creating memorable moments,Park Plaza caters to both leisure and business travellers with stylish guest rooms and versatile meeting facilities which are perfectl
47、y complemented by award-winning restaurants and bars.We present a wide choice of travel destinations and accommodation options,from vibrant city-centre hotels to tranquil beachside resorts,all united by authentic service and modern,inviting spaces.Authenticity is at the heart of Park Plaza.We believ
48、e in providing a hotel experience that is tailored to the individual and their needs.Our commitment to originality gives each guest a real experience,all against the elegant backdrop of a modern space with leading design.We pride ourselves on delivering comfort,impeccable service and the chance to e
49、xplore a destination like the locals do through one-of-a-kind dining experiences.Guests cherish our warm and vibrant atmosphere,often coupled with live music and entertainment.Feel the artotel London Battersea Power StationPark Plaza Westminster Bridge LondonPark Plaza London RiverbankPark Plaza Von
50、delpark,AmsterdamSTRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTS1213ANNUAL REPORT AND ACCOUNTS 2021PPHE HOTEL GROUPAPPENDICESOur brandscontinuedLEISURE AND OUTDOOR RESORTS/CAMPING&GLAMPING/SELF-CATERINGLEISURE AND OUTDOOR RESORTS/CAMPING&GLAMPING/SELF-CATERINGArena One 99 GlampingCamping Ho
51、me Next-Arena KaelaArena Hotels&ApartmentsArena Hotels&Apartments is a collection ofhotels and self-catering apartment complexes offering relaxed and comfortable accommodation within beachfront locations across the historic settings of Pula and Medulin in Istria,Croatia.Arena Hotels&Apartments featu
52、res contemporary and warm design/interiors accompanied by welcoming and friendly service,offering a holiday full of opportunities for exploration and relaxation complemented by a food and drink offering with a touch of local flavour.Arena Hotels&Apartments is your destination host and guide,a home a
53、way from home catering for families,couples and Grand Hotel BrioniArena CampsitesArena Campsites are located in exclusive beachfront sites across the southern coast of Istria,Croatia.Situated within close proximity of the historic towns of Pula and Medulin,each campsite provides a distinctive offeri
54、ng and relaxed environment from which guests can experience Istrias areas of natural beauty and enjoy outdoor activities from April to October.We have consistently invested in the portfolio,with significant investments in repositioning two campsites between 2018 and 2020,relaunching as Arena One 99
55、Glamping and Arena Grand Kaela Campsite.We are excited about our third repositioning of,and investment in,ArenaStoja C STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTS1415ANNUAL REPORT AND ACCOUNTS 2021PPHE HOTEL GROUPAPPENDICESChairmans statementEli Papouchado ChairmanAdapting to new challe
56、ngesReflecting on 2021,I am very humbled by the adaptability,skill and dedication of our teams across the business.Their hard work during the last two years has aided the Group immensely in navigating through the most difficult trading conditions ever seen in our industry.Despite these unprecedented
57、 trading conditions progress has been made against ourstrategic priorities.Many of our teams have had to work hard to rebuild momentum following extended periods of government-financed support,such as furlough,but they have come together stronger than ever,continuing to welcome our guests where we c
58、an and with the best safety and customer service possible.Our Executive Leadership in particular voluntarily signed up to a number of salary sacrifice schemes,deferments and waiver of incentives throughout 2020 and 2021.I would like to place on record my gratitude for our teams and leaderships suppo
59、rt,commitment and exceptional efforts during these difficult times.PPHE hascontinued to make strong progress throughout the year,and we are proud thatthe value of our property portfolio nowstands at 1.8 billion.Our 200+million pipeline is robust and includes flagship developments such as artotel Lon
60、don Hoxton and Grand Hotel Brioni Pula,alongside repositioning projects in Croatia and Italy.There will be many great openings to watch out for over the next few years which we are very excited for,and our long-term partnership with Clal Insurance(“Clal”),which unlocked 113.7 million of equity,has e
61、nabled us to pursue further strategic growth opportunities and will continue to do so as the pandemic subsides.Delivering for all stakeholdersWe recognise the unique but vital role that each of our stakeholders plays in the Groups success.As such,creating and delivering value for their benefit is th
62、e driving force in all that we do.This is visible in:our passion for creating memorable guest experiences;our commitment to maintaining an open andconstructive dialogue with investors;ourprioritisation of the well-being and development of our team members;and our willingness to serve the communities
63、 in which we operate.I was pleased to see theprogress made in our stakeholder engagement activities over the course of theyear,particularly the active dialogue maintained with representatives of independent shareholders in order to remain guided by their views and allowing us to adapt our approach w
64、herever possible in response.The maintenance of a robust governance framework is key to the delivery of long-term sustainable value and has been crucial to navigating the circumstances of the pandemic as well as the recovery process.2021 saw us make a number of important strides in corporate governa
65、nce,including establishing a designated Environmental,Social and Governance(ESG)Committee to add necessary rigour and structure to the manner in which we deliver our governance goals and delivering our first Task Force on Climate-related Financial Disclosures(TCFD)Report,which we welcomed as an oppo
66、rtunity for meaningful and structured engagement with the risks and opportunities presented by climate change,as well as an advisory vote to shareholders on the Remuneration Report included in the financial statements and the Remuneration Policy applicable as of 2022.The Deputy Chairman spearheads o
67、ur corporate governance strategy,and full details of our activities this year are set out in his statement on pages 90 to 135.DividendHaving suspended dividend payments in light of ongoing uncertainty due to COVID-19,we have continued to review our policy in line with business performance and cash f
68、low.Government measures have continued to restrict travel demand and the Group has subsequently received government support during the year across its different operating regions.The Board is therefore of the view that it is neither sustainable nor appropriate to propose a dividend in respect of 202
69、1.The Board appreciates the importance of dividends and will continue to review any future dividend payments in line with the recovery trajectory and the business returning to cash flow positive trading.Looking aheadWe were heartened to see momentum return to the business from May 2021 onwards,as ma
70、ny of our markets opened up,albeit with a few restrictions,and international travel resumed.During this period,it was clear that demand for our high quality,well-located hotels remained strong.The emergence of the Omicron variant in November resulted innew measures being introduced and demand declin
71、ing.We are well-aware that there will continue tobe industry-wide challenges ahead throughout this road to recovery.While uncertainty will continue as individual markets react to their own evolving situations that cannot be fully predicted,we will continue to deliver on our strategy,opening our door
72、s where we can and delivering the best experience possible for our customers.As vaccination and booster programmes continue to be rolled out in countries all over the world,I expect that our recovery willremain strong,as it was in the UK and Croatia in the second half of this year.The Boards optimis
73、m for the future is founded on our proven ability to recover through challenging times.We are well-placed to continue to outperform the sector whenever and wherever restrictions are eased,as our unique business model,strong financial position,proven management team,superior expertise and exciting de
74、velopment pipeline continue to position us well into 2022 and beyond.Eli Papouchado ChairmanPPHE WINS AWARD ASTOP 6 BEST PLACES TO WORKSTRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTS1617ANNUAL REPORT AND ACCOUNTS 2021PPHE HOTEL GROUPAPPENDICESPresident and CEOsreviewBoris Ivesha President&C
75、hief Executive OfficerThroughout 2021,we continued to manage effectively the ongoing challenges presented by the pandemic and the subsequent industry-wide uncertainty and disruption this caused.Once again,our dynamic owner/operator business model gave us the ability to adapt to ever-changing market
76、conditions,underpinned by the Groups strong financial position and our well-invested portfolio following our recent 100+million investment programme.The Group is well-positioned to benefit frommarket recovery.2021 in reviewTrading in the year was challenging in the first six months as the ongoing pa
77、ndemic severely reduced activity levels due to government-imposed domestic and international travel restrictions and social-distancing measures.Consequently,most ofthe Groups properties were temporarily closed or operating at reduced capacity.During Q2,travel restrictions were progressively eased ac
78、ross the Groups operating markets,to varying degrees and at varying times.From mid-May in the UK and from June in Continental Europe,activity increased gradually,driven primarily by leisure demand from domestic markets with bookings characterised by short lead times.By the end of Q2,the majority of
79、the Groups properties were open.With vaccination programmes across all our operating markets firmly underway in the second half of the year,international travel restrictions were eased,supported by widespread lateral flow and PCR testing as well as the introduction of vaccination passports across Eu
80、rope.This led to good trading momentum and revenue generation in the second half of the year,underpinned by a strong performance in the UK and Croatia and our successful room rate-focused strategy.Additionally,the Group benefited from sports events,such as the 2020 UEFA Championships and the Cricket
81、 Hundred Series,going ahead.Corporate travel and meetings and events demand continued to grow,and the booking pace improved until mid-November when demand slowed due to the spreading of the Omicron variant.This new variant resulted in governments temporarily introducing measures.Once these are again
82、 eased we expect to regain momentum.Against this backdrop,the revenue performance of several of our properties outperformed the market.The Groups proactive commercial strategy enabled us to secure contracted group business,alongside demand generated by essential stays.Park Plaza Victoria London and
83、Park Plaza London Waterloo operated asUK Government quarantine hotels for partof the year,which supported revenue generation during a period of low demand.Park Plaza Westminster Bridge London was proud to be chosen as the exclusive host hotel for players and support teams of the 2021 Wimbledon Champ
84、ionships.Throughout this period of uncertainty for the hospitality industry,we took pride in our responsiveness and adaptability to ever-changing market conditions,which include an increasingly pressured labour market.While we are not immune to this well-documented issue,which spans a number of sect
85、ors,our continuous focus on being an employer of choice to attract and retain talent has positioned us strongly in the current labour market.Furthermore,our decision pre-pandemic to bring housekeeping services in-house has helped insulate the Group from the disruption to operations caused by these l
86、abour shortages.We are delighted that our efforts in this area have been recognised by several industry accolades,and throughout the year,the health and safety of our colleagues,and all stakeholders,have remained our priority.Full details on the Groups operational performance by region are set out i
87、n the Business Review.Improved financial performance The Groups overall financial performance improved year-on-year,reflecting some recovery in activity levels as the year progressed,albeit from a low base.Reported total revenue increased by 38.9%to 141.4 million(2020:101.8 million)and EBITDA improv
88、ed to 25.1 million(2020:(10.1)million),resulting in an EBITDA margin of 17.7%(2020:(9.9)%).Once again,key operating metrics wereimpacted by property closures and reduced capacity in the first half of the year,however the Groups rate-focused strategy delivered ayear-on-year recovery in average room r
89、ateto 117.0(2020:105.1),with a more gradual improvement in demand during theyear resulting in occupancy of 30.7%(2020:28.0%).RevPAR increased by 22.1%to35.9(2020:29.4),34.6%of the level reported in FY 2019.The Groups financial position remains strong,with a total consolidated cash balance of 136.8 m
90、illion at 31 December 2021(31 December 2020:114.2 million).Our property portfolio was predominantly valued by Savills and Zane at 1.8 billion as at 31 December 2021.EPRA NRV per share increased by 0.3%to 22.15 per share.The adjusted EPRA earnings per share was(44)pence(2020:(123)pence).Full details
91、of the financial performance areset out in the Financial Review.Delivering strategic progress Throughout 2021 we made good progress against the Groups long-term growth strategy while continuing to navigate the ongoing disruption to operations.The flexibility that our owner/operator model provides en
92、ables the Board to take a long-term view and gives us control over the scope and phasing of our 200+million development pipeline and investment projects.This development pipeline underpins long-term sustainable growth.Our long-term partnership with Clal,announced earlier in the year,has unlocked equ
93、ity to give the Group further financial headroom to capitalise on growth opportunities to the benefit of all stakeholders,as well as support our recovery.Development pipeline updateIn the UK,construction of the new artotel London Hoxton,our largest development project,continued to plan.The new build
94、ing which will comprise a premium lifestyle hotel and office space is expected to complete by2024.artotel London Battersea Power Station,which is to be operated by the Group under a long-term management agreement,is expected to open during the second half of2022.Two further projects are planned in L
95、ondon:a mixed-use scheme including a 465-room hotel adjacent to Park Plaza London Park Royal;and a mixed-use scheme including a 186-room hotel and office space close to our London South Bank hotels.“Our recovery is well-underway and we are regainingmomentum.We are building future value through a pip
96、eline filled with potential.”STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTS1819ANNUAL REPORT AND ACCOUNTS 2021PPHE HOTEL GROUPAPPENDICESPresident and CEOs review continuedRESTAURANTS AND BARSArca AmsterdamIn Croatia,the repositioning of Hotel Brioni in Pula is almost complete.This 227-room
97、,full-service hotel is expected to relaunch for the 2022 summer season.In Q4,works started on the conversion of the Groups property in the centre of Zagreb into a luxuryhotel.As previously announced,we took thedecision in 2020 to pause and reassess our development project in New York City.New hotel
98、acquisitionsIn Q4,we announced two strategic acquisitions which have strengthened our pipeline,expanded our presence in Europe and marked our entry into two new and exciting markets:Austria and Italy.We acquired the FRANZ Ferdinand Mountain Resort in Nassfeld,Austria,a strategic fit that complements
99、 our summer leisure business in Central and Eastern Europe and the DACH region.This acquisition also builds on the seasonal synergies which can be achieved due to the hotels proximity to our Croatian operations.In addition,Austria is one of the Groups largest customer markets for our Croatian operat
100、ions,and this hotel will help us further raise the Groups profile in this important market.The city of Rome is one of southern Europes key gateway cities and has been a strategic target for the Group.The acquisition in November of a 4-star,101-room property adds another key capital city to our portf
101、olio.The site provides the opportunity to reposition the property and further bolsterour development pipeline.Further details about our development pipeline projects and acquisitions are outlined on pages 42 and 43.Our partnership with Radisson HotelGroup For more than two decades,PPHE Hotel Group h
102、as had an exclusive perpetual licence from Radisson Hotel Group(“Radisson”),which gives the Group the right to develop and operate Park Plaza branded hotels and resorts in Europe,the Middle East and Africa.Radisson is part of the worlds second largest hotel group by number of rooms.This strategic pa
103、rtnership gives the Group(including its wholly owned artotel brand)access to Radissons state-of-the-art central reservation and global distribution systems,its global sales and marketing capabilities,and more than 24 million loyalty programme members.Employer of choice Our people and values are at t
104、he heart of our business and at the core of everything we do.We harness an open,honest,family values culture across the business,whether managing our hospitality assets or delivering consistent operational excellence across our portfolio.As well as developing this culture,a key focus has been safegu
105、arding the well-being of our team members throughout the pandemic.We recognise the importance of a strong employer brand,particularly in the current recruitment environment,and we have a strong track record of investing in our teammembers to attract and retain talent.Ongoing investment in the develo
106、pment ofnew technologies to facilitate people management,learning and development,communications,and data and analytics,coupled with our values,strong culture and industry-leading people initiatives,further strengthen the Groups position for recruitment.Industry wide,recruitment has become increasin
107、gly challenging across all our operating markets.We have proactively enhanced our recruitment approach to enable the Group to stand out from the competition.We have bolstered our talent management and recruitment teams to ensure we retain talent and recruit new teammembers.Our recruitment strategy i
108、s centred around talent and brand attraction,promotion of PPHE Hotel Group as an employer of choice,showcasing the Companys culture,and targeting candidates via LinkedIn and other social media and online platforms.We have ensured that our pay rates remain competitive,and we have introduced retention
109、 bonuses and have relaunched our recommend a friend incentive scheme,through which more than125 people have joined the Group in the UK and The Netherlands.During the year,we recruited more than 1,350 team members across the Group.In London,we have launched our own centralised recruitment service and
110、 we have strengthened our partnerships with local job centres.In the CEE region,we have benefited from our ability to share team member resources across our countries of operation.Best Employer in Hospitality andotherindustry recognitionWe are proud that our ongoing investment inour people has been
111、recognised through a number of awards during the year:Best Employer in Hospitality award and Top-6 Best Places to Work in Hospitality by leading UK hospitality trade publication The Caterer;winner of the Best Management Preparation Award at the HR in Hospitality Awards 2021;and our team was voted HR
112、 team of the Year at the HR in Hospitality Awards 2021.Additionally,in Croatia,the Groups subsidiary Arena Hospitality Group d.d.(“Arena”)wasawarded the national Safe Stay in Croatia label.In addition to recognition of our business,wewere delighted that a number of our people were identified for the
113、ir talent,excellence and contribution.This included Chief Corporate&Legal Officer Inbar Zilberman,who was featured in Women toWatch and Role Models for Inclusion in Hospitality;Daniel Pedreschi,Regional Vice President Operations,the UK,was awarded the coveted Hotelier of the Year at the 2021 Hotel C
114、ateys;and Park Plaza Westminster Bridge Londons Executive Chef Oliver Ruiz won the Hotel Chef of the Year(more than 250 covers)Award at the 2021 Hotel Cateys,a huge achievement against strong competition.Committed to creating a memorable guest experienceWe are committed to creating memorable experie
115、nces for all our guests,underpinned by our high quality,well-invested portfolio of properties in desirable locations.Our guest safety and well-being programmes were onceagain accredited by SGS,a leading inspection,verification,testing and certification company.We have continued to adapt our offer,an
116、d the way we engage with our guests has evolved,with an acceleration in digitalisation trends during the pandemic.Digital services and dedicated Apps for Park Plaza and artotel offer guests reduced person-to-person contact during their stay.These technologies enable guests to check-in online and hav
117、e a digital room key via their smartphone.Guests also receive a pre-arrival email with ancillary services to personalise their stays,including room upgrades,early check-in and late check-outs,breakfast and dinner options or special amenities.During their stay,real-time messaging options through chat
118、 or WhatsApp enable guests to communicate with our team members,and they are abletoorder room service online.Contactless check-out and various new payment options are available on departure.Our team members2021 has been another challenging year forour team members.We have stayed connected with our t
119、eam members to support their well-being,training and career development.The internal communications initiatives we have put in place during the pandemic,including re-boarding colleagues as hotels reopened and enhanced learning and development programmes,have helped drive engagement and loyalty and h
120、ave helped us nurture and support our teams.On behalf of the Board,I would like to thank all our team members for their commitment,professionalism and hard work throughout the year.Strategy updateDuring 2021 we refined our strategy,intended to guide us through our next phase of growth by continuing
121、to do what we do well,taking advantage of opportunities and continuing to mitigate risks through further diversification.Our aim is to continue to focus on upper upscale city centre and lifestyle hotels and continue our investment in our leisure and outdoor offering.In addition,we recognise that our
122、 award-winning hospitality management platform presents an excellent growth opportunity through managing hospitality assets for our joint venture partners and third-party owners.Looking ahead As we have demonstrated throughout the pandemic,as soon as measures are eased we are able to capitalise on t
123、ravel demand,which at the early stage is predominantly driven by domestic leisure travel.The New Year started with restrictions and lockdown measures in place across all our operating regions.However,with the impact of the Omicron variant on hospitalisation rates less significant than initially fear
124、ed latein 2021,governments started easing measures in January,which immediately resulted in an increase in new bookings.In the UK,our most important market,new bookings are currently trending at 65%of the levels in 2019.We have also seen an increase in international bookings as travelling between co
125、untries has become easier.We expect these trends to continue and are confident that in addition to leisure travel,we will shortly see a return of corporate travel with the working-from-home guidance now removed across most of our operating regions.The number of new meetings and events enquiries has
126、remained solid throughout and we expect a particularly buoyant second half of 2022 inthis segment.Our well-invested portfolio,our proactive leadership team and our dedicated and passionate team members will drive our recovery as we prepare for the next phase ofgrowth with several exciting new openin
127、gs this year and next.Boris Ivesha President&Chief Executive OfficerSTRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTS2021ANNUAL REPORT AND ACCOUNTS 2021PPHE HOTEL GROUPAPPENDICESCore,upper upscale,city-centre hotelsLeisure and outdoor hospitality Hospitality management platformCreatingstakeho
128、ldervalue 2DEVELOP1PURCHASE4(RE)FINANCE3BRANDBusiness modelOUR PURPOSEHOW WE CREATE SHAREHOLDER VALUEHOW WE CREATE VALUETHE VALUE WE SHAREKEY SOURCES OF VALUEPrime property portfolioOur real estate portfolio consists of properties in the heart of strategic gateway cities and resort destinations.In-h
129、ouse hospitality management platformOur expert team of hospitality specialists manage our own properties as well as those of third parties.Our peopleOur strong track record of creating memorable guest experiences is consistently delivered by our team members.Multi-brand approachWe select the right b
130、rand for each property,using our own as well as those from the Radisson Hotel Group.International networkOur strong international network cultivated in the past 30 years includes banks,contractors,suppliers and strategic partners.Financial strengthOur portfolio has grown from a single property into
131、a 1.8 billion portfolio without diluting shareholders,and we enjoy a strong cash position.Creating valuable memories for ourguests and value for our assets,people and local communities.1We purchaseWe typically acquire properties which we believe have significant upside potential2We developWe(re)deve
132、lop and redesign our acquired assets,drawing on the skillsofour experienced senior management team,with specialists inevery relevant discipline3We brand properties andimprove operating performance We brand properties and strive for operational excellence,creating significant value at every point in
133、the value chain4We(re)finance to fund further investments Through refinancing our properties,weare able to release capital for new investments,enabling the further growth of our GroupTrustRespectTeamworkEnthusiasmCommitmentCareUNDERPINNED BY OUR PEOPLE,VALUES AND CULTUREThe Groups leadership culture
134、 is one of connecting,inspiring,innovating and empowering,and we foster an environment based on:STRATEGIC BLOCKSTeam membersWe offer rewarding international employment opportunities for our team members withcontinuous investment intraining programmes.GuestsWe offer memorable hospitality experiences
135、invibrant destinations with our high quality products andservices.InvestorsOur shareholders benefit from the attractive industry dynamics ofthemarkets in which weoperate aswellasour flexible business model,developments andoperating skills,inthe form ofprogressive dividendpayments.Local communitiesWe
136、 care about our neighbourhoods and make positivecontributions toour local communities and thepeoplewhowork and/or livetherethrough fundraising activities,employment opportunities,volunteering and local resourcing partnerships and charities.AffiliatesOur partnership with Radisson Hotel Groupgives us
137、access to global distribution systems,powerful online and mobile platforms and global sales,marketing andbuying power.SuppliersAs an owner/operator,long-term sustainability and ethicaloperations are highon our agenda,including supplychain management and the development of long-term relationships wit
138、h strategic partners,many ofwhom are local.RESTAURANTS AND BARS NON-DILUTIVE CAPITAL APPROACHGUEST SATISFACTION DIVERSIFICATION OF PROPERTY PORTFOLIO PEOPLE AND CULTURE ESGSTRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTS2223ANNUAL REPORT AND ACCOUNTS 2021PPHE HOTEL GROUPAPPENDICESREAL ESTATE
139、Strategy at a glanceSTRATEGIC BLOCKS2021 PERFORMANCE2022 PRIORITIESRELATED RISKS AND OPPORTUNITIESKPIsProperty:Progressed investments in pipeline projects,including artotel London Hoxton and Zagreb Extended pipeline with acquisition in Rome,Italy Submitted planning application to develop new hotel n
140、ear WaterlooStation Procured renewable energy in the UK,The Netherlands andGermany Continued to maintain Green accreditationsOperations:Reopened majority of portfolio post lockdowns Revenue generation focus,balancing contracted business withdriving top line growth from leisure travel Reengaged and r
141、ebuilt teamsProperty:Progress development projects in London andZagreb CAPEX allocation for repositioning programmes in Zagreb,Rome and Budapest Pursue new growth opportunities Property site visits to review utility use in our hotels Environmental assessment of construction sites to achieve highest
142、standard of certificationOperations:Continue to rebuild the teams and overcome recruitment challenges Drive the recovery of all properties Focus on mitigating supply chain disruptions Continue to drive efficiencies through technologyimplementationsProperty:Development project delivery page 31 Fundin
143、g and liquidity page 30 ESG stakeholder perception page 34Operations:Talent attraction,engagement and retention page33 Market dynamics page 29 Economic climate page 30 Operational disruption page 32 Technology disruption page 32Property:Successfully deliver openings and repositioningprojects EPRA NR
144、V EPRA EPS Net return on shareholder capital Disclosure of Scope 1,2,and 3 carbon emissions in TCFD report Carbon neutrality no later than 2050Operations:EBITDA and EBITDA margin RevPAR Recruitment and retention Employee engagement Guest rating score Health and safety assessment scoresProperty:Progr
145、essed investments in pipeline projects most notably Grand Hotel Brioni Pula Extended pipeline with acquisition in Nassfeld,AustriaOperations:Reopened majority of portfolio post lockdowns Revenue generation focus,delivering a strong summer season inCroatia Reengaged and rebuilt teams Integrated new p
146、roperty in Nassfeld,AustriaProperty:Launch Grand Hotel Brioni Pula Progress CAPEX investment in third campsite,Arena Stoja Start repositioning programmes for hotels in Austria and Pula(Hotel Riviera)Pursue additional growth opportunities Operations:Continue to rebuild the teams and overcome recruitm
147、ent challenges Drive the recovery of all properties Focus on mitigating supply chain disruptions Continue to drive efficiencies through technologyimplementationsProperty:Development project delivery page 31 Funding and liquidity page 30 ESG stakeholder perception page 34 Operations:Talent attraction
148、,engagement and retention page 33 Market dynamics page 29 Economic climate page 30 Operational disruption page 32 Technology disruption page 32Property:Successfully deliver openings and repositioningprojects EPRA NRV EPRA EPS Net return on shareholder capital Disclosure of Scope 1,2,and 3 carbon emi
149、ssions in TCFD report Carbon neutrality no later than 2050Operations:EBITDA and EBITDA margin RevPAR Recruitment and retention Employee engagement Guest rating score Health and safety assessment scoresOperations:Continued implementation of digital services including online check in and check-out,dig
150、ital key,online ordering,chat and more Outperformed on recruitment and managing staff shortages Further consolidation of supply chain and leveraging our scale Engaged specialist support on carbon emissions strategy andreporting Continued to create safe environments for our team members andour guests
151、 Increased engagement with our team members Championed diversity and inclusion Supported local hospitals and key workers Provided education opportunities for local schools and graduatesOperations:Opening of artotel London Battersea Power Station,managed by the Group Continue to integrate Austria and
152、 Italy as new regions for the Group Deliver elevated artotel brand experience and pipeline projects Pursue growth opportunities for the platform through third party or joint venture management agreements Continue to drive efficiencies for the managed properties through centralisation and technologie
153、s Continue development of ESG strategy Appoint Responsible Business Ambassadors at every property Continue to drive recruitment programmes to create jobs and opportunities for local communitiesOperations:Market dynamics page 29 Economic climate page 30 Talent attraction,engagement and retention page
154、 33 Operational disruption page 32 Technology disruption page 32 Unrestricted cyber attack page 31 Data privacy page 32 Health,safety and security page 33 ESG stakeholder perception page 34Operations:EBITDA Successful launch of new openings Growth in portfolio Growth in fee-based income through thir
155、d party or joint venture management agreements Monitoring of gender pay gap for the UK and TheNetherlands Identifying metrics for diversity and inclusionSTRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTS2425ANNUAL REPORT AND ACCOUNTS 2021PPHE HOTEL GROUPAPPENDICESREAL ESTATECore,upper upscale,
156、city-centre hotelsLeisure and outdoorhospitalityHospitality management platformOur approach to risk managementOur embedded and proactive approach to risk management continues to help us navigate the significant challenges we face.Through our risk management process we maintain a clear view of our mo
157、st prominent threats and look ahead at the emerging risk trends which could have a notable impact on our business.The strength of our risk management programme means leadership decisions are aligned with our risk appetite and are made in full awareness of the threats we face.The integration of risk
158、management and routine assessments within each corporate function allows us greater information at the leadership level and ensures each function remains alert to risks and is accountable for reporting on them on a regular basis,whether or not their profile has changed.A solid foundation of risk awa
159、reness and focused risk mitigation has underpinned our resilience during the COVID-19 pandemic and supported the proactive response of ourteams to the various related risk impacts.In 2021,our leadership team has maintained itsflexible and proactive approach to the challenging risk environment.Key ac
160、tions during the year have included the strengthening of our cash position,the rebuilding of our teams to meet demand during periods of recovery and upholding the high standards of health and safety within our hotels and resorts.Our Risk Reward strategy is aligned to our strategic objectives and has
161、 been updated and reviewed by the Board during the year.This year we have demonstrated that our appetite for taking new opportunities through acquisitions remains intact.In obtaining Board approval for acquisitions or development projects,the capacity of management to manage or deliver the project a
162、nd the impact on the financial stability of the Group are both key areas of focus.We are not willing to increase our exposure in matters of environmental and climate related risk,and we are committed to tackling the risks associated with the transition to a low-carbon economy.This year we have looke
163、d in greater depth atvarious climate related risk scenarios toidentify and assess the key threats toourlong-term objectives.See our TCFD Report on Page 88.OUR RISK MANAGEMENT FRAMEWORKOur established Enterprise Risk Management(ERM)framework supports the pursuit of our objectives through enabling inf
164、ormed and calculated risk-taking,while protecting our financial strength and reputation.The ERM framework defines clear accountabilities through our risk governance model and our risk management process.Our Risk Reward strategy sets the tone for our approach to risk and articulates the general appet
165、ite to risk-taking and tolerance.Risk appetite is cascaded throughout the Group through our policies and procedures.Roles,responsibilities and reporting structure are defined in a Risk Policy.The Board takes ultimate responsibility for risk management supported by the Audit Committee who oversee and
166、 advise the Board on the Groups risk exposure,risk appetite and future approach to risk.Current and emerging risk identification,assessment,treatment,reporting and monitoring including regular functional risk updates,Executive Leadership Team risk forums,scenario analysis for key decisions and monit
167、oring of key riskactions.The output of this process is reviewed and challenged bytheAudit Committee on a quarterly basis.Assurance that risks are both identified and well-managed is obtained from various sources including:Compliance/Health and Safety Consultants/Internal Audit/External Audit/Other t
168、hird party assurance providersRISK REWARD STRATEGYRISK GOVERNANCERISK MANAGEMENT PROCESSRISK ASSURANCEReportTreatAssessIdentifySTRATEGIC OBJECTIVESRISK-INFORMED DECISIONSOUR CHANGING ENVIRONMENT RISK DRIVERS AND EMERGING THREATSWe recognise the importance of understanding the lasting impacts of majo
169、r events such as the COVID-19 pandemic and Brexit,as well as emerging threats like climate change,economic volatility and political instability,to ensure we maintain our organisational and strategic resilience in the years ahead.Our business model and operations could be influenced by many external
170、developments including post Brexit changes to the UK regulatory environment,potential changes in tax legislation,long-term shifts in consumer behaviours following the pandemic,labour market pressures through restricted migration,growing pressure on the cost of living and an increased threat to socia
171、l cohesion across our regions and markets.We will respond proactively to the changing business environment by focusing on our strategic pillars such as the diversification of our property portfolio,our people and culture,guest satisfaction and our ESG credentials.Global disruptionThe COVID-19 pandem
172、ic has been the biggest risk event we have experienced,andthere is potential for further global orregional disruption through new waves orvariants of the virus emerging.The future direction of the pandemic will determine the severity of our exposure to many of our principal risks.Global travel restr
173、ictions have a significant impact on market demand and economic growth.We could see further disruption through restrictions imposed on our hotel operations or through supply chain issues and labour shortages.Other global conditions such as the conflict in Eastern Europe could also disrupt some of ou
174、r markets through restricted travel and dampened demand.As events unfold,the Board will continue to monitor the impact.We have proven our resilience in the face of COVID-19,and we are well-prepared for future disruption,with robust plans in place to address heightened risk and protect the stability
175、and future growth potential of our business.Macro-economic volatilityVolatility of the long-term economic outlook will also influence our assessment of risk in the year ahead.Changing macro-economic conditions with inflationary pressure and slowing growth could impact the speed of recovery for the h
176、ospitality sector and affect the accessibility of finance to fund future opportunities.We take a proactive approach to monitoring macro-economic factors and act to ensure we are well-positioned to withstand times ofstress and maximise our opportunities asconditions improve.Climate changeThe impact o
177、f climate change will emerge through risks that we are already exposed to.Increasing physical risks such as flooding,water stress and rising mean temperatures across our regions would heighten our principal risk of operational disruption and could increase costs.The global response to climate change
178、 could drive changes in our market over the long term.Carbon pricing and taxes could see the cost of international travel increase which may impact travel patterns from certain market segments.Our guests increased awareness and concern regarding their individual environmental footprint could also im
179、pact market dynamics,presenting as both a risk and an opportunity as more booking decisions would be influenced by environmental credentials.This will also be increasingly important for securing corporate contracts and new meetings and events business with many organisations acting to deliver upon n
180、et-zero carbon pledges.Several of our principal risks could be exacerbated by government commitments to reduce carbon emissions which could lead to further developments and changes in regulation across travel and tourism,construction and property management.Funding could also become increasingly dif
181、ficult to secure as banks increase scrutiny on the environmental credentials and carbon impact of a business as part of their lending process.This year we have performed scenario analysis to improve our understanding of the various physical and transition risks we face in respect of climate change a
182、s well as any associated opportunities.The analysis considered short,medium and long-term threats under three potential scenarios for average temperature increases which are used to assess the risks and to plan and prioritise any associated mitigating activity.See our TCFD Report on pages 87 to 89.W
183、ith increasing scrutiny on environmental matters from investors,customers and partners,this year we have included a new principal risk regarding stakeholder perception of the Group in respect of ESG matters.STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTS2627ANNUAL REPORT AND ACCOUNTS 2021PP
184、HE HOTEL GROUPAPPENDICESAlmostCertain 90%Likely60%x 90%Possible40%x 60%LikelihoodUnlikely10%x 40%Very unlikely250 covers)by The Caterer and Daniel Pedreschi,VP Operations UK,won Hotelier of the Year,also from The Caterer.Inbar Zilberman,our Chief Corporate&Legal Officer,was featured in Women to Watc
185、h and Role Models for Inclusion in Hospitality.However,for us,allour team members deserve praise and recognition for their outstanding performance during the year.STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTS4041ANNUAL REPORT AND ACCOUNTS 2021PPHE HOTEL GROUPAPPENDICESOur exciting 200+mil
186、lion pipeline is filled with potential and ranges from high profile ground-up development projects to conversions,and from land sites to existing hotels with repositioning potential.Additional repositioning projects are under review in Berlin,Cologne and Budapest.202020222021ARTOTEL LONDON HOXTONART
187、OTEL LONDON BATTERSEA POWER STATION*ARTOTEL IN ZAGREB CITY CENTREARENA STOJA CAMPSITE,PULAGRAND HOTEL BRIONI PULAARTOTEL IN ROME CITY CENTREARTOTEL IN PULA CITY CENTRE20242023PROPERTY CONSTRUCTIONPROPERTY CONVERSIONPROPERTY REPOSITIONINGOur pipelineARTOTEL LONDON BATTERSEA POWER STATION,UKARTOTEL LO
188、NDON HOXTON,UKLONDON PIPELINE,UKGRAND HOTEL BRIONI PULA,CROATIAARTOTEL IN ZAGREB,CROATIAARENA STOJA CAMPSITE PULA,CROATIAARTOTEL IN ROME,ITALYARTOTEL IN PULA,CROATIALONDONLONDONLONDONPULAZAGREBPULAROMEPULAEntering its final stage of construction,artotel London Battersea Power Station represents the
189、first artotel opening in the UKs capital.Part of the Battersea Power Station redevelopment scheme,this iconic premium lifestyle hotel will offer 164 rooms,an art gallery,cultural programming,rooftop garden with swimming pool and destination restaurant and bar.Our largest current construction project
190、,expected to be completed in H1 2024.Occupying a prime location in Hoxton,this 27-storey mixed-use scheme will include a premium lifestyle artotel with 343 rooms(including 60 suites),an art gallery,two original Banksy artwork pieces,destination restaurants,a bar,leisure facilities,events space and 5
191、,900m2 of office space.The Group has applied for planning to develop a mixed-use scheme consisting of a 186-room hotel and 750m2 of office space.This development site is located near the Groups Park Plaza London Waterloo property.In addition,the Group has planning to develop a 465-room hotel on the
192、site adjacent to its Park Plaza London Park Royal property for which itis designing plans.Following two years of extensive redevelopment,Grand Hotel Brioni isset to reopen.The spectacularly located hotel has been transformed into a premium resort,consisting of227 rooms and suites,an infinity outdoor
193、 pool,indoor swimming pool,several restaurants and bars and achildrens club.Marking the Groups debut in the Croatian capital,construction work has commenced to convert a former office building into a 118-room premium lifestyle artotel.Located in the city centre,this hotel will offer an art gallery,a
194、 rooftop pool,destination restaurant,bar and leisure facilities.Located on a peninsula,offering 360 views of the Adriatic,Arena Stoja Campsite will be transformed into an upper upscale property with a choice of premium mobile homes and glamping lodges.Guests will benefitfrom a newly created on-siter
195、estaurant,bar and espressamente illy.Marking the Groups entry into Italy,the historic Londra&Cargill hotel in the centre of Rome will be transformed into the Groups first artotel in Italy.Following repositioning,this hotel willoffer 101 rooms,an art gallery,a destination restaurant and bar,leisure f
196、acilities and parking.Located in the centre of Pula,with itsrich Roman-era history,this hotel isnear the marina and close to the Roman amphitheatre.Following extensive transformation,this artotel will offer 80 rooms,an art gallery,arooftop garden with pool,a destination restaurant and bar andleisure
197、 facilities.Total rooms 164Total rooms 343Total rooms 651Total rooms 227Total rooms 118Total units 75Total rooms 101Total rooms 80*artotel London Battersea Power Station is owned by the Battersea Power Station Development Company and will be operated by the Group under a management agreement,generat
198、ing fee-based income.STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTS4243ANNUAL REPORT AND ACCOUNTS 2021PPHE HOTEL GROUPAPPENDICESmYEAR-ON-YEAR CASH FLOWReportedcash 31.12.20114.2Operational cash flow(EBITDA and working capital)25.7Investmentin properties2and newacquisitions(101.8)Debt servi
199、ce1(50.1)Loanrepayments70.9Joint venturetransaction(40.4)Otherexceptionalitems(includingforeign exchange)125.8Undrawnfacilities76.8New facilities and movement in restricted cashReported cash 31.12.21136.8(7.5)1 Including leases and unit holders in Park Plaza Westminster Bridge London2 8 million refl
200、ects regular CAPEXFinancial reviewDaniel Kos Chief Financial Officer&Executive DirectorOverview of 2021For the second consecutive year the Groups financial performance was severely impacted by the COVID-19 pandemic.The first half of the year was dominated with lockdowns and travel restrictions in al
201、l of our operating regions,however trading bounced back quickly in the second half-year due to pent-up leisure demand.A strong leisure season caused our Croatian region to reach 93%of its 2019 revenues in the third quarter of 2021.Although this was the second time the Group faced severe lockdown and
202、 travel restrictions,reopening the hotels after thisperiod has proved more challenging thanin 2020.Oursignificantly reduced workforce at reopening,paired with a challenging labour market,caused staff shortages in all our operating regions.Thanks to the dedication and hard work of our staff we were a
203、ble to cope with the demand fluctuations throughout the last six months of the year.However,as a consequence of these shortages we are faced with increased wage inflation in all our operating regions.Despite inflationary pressures,the Group continued to take a highly disciplined approach to expendit
204、ure with a large focus on further automation and centralisation of back office functions.Furthermore demand growth throughout the second half of the year showed to have a positive drive to ouraverage room rates,which in some properties were starting to exceed 2019levels.During the year we entered in
205、to a significant joint venture transaction,whereby we divested 49%of two of our London assets toClal Insurance.With this transaction the Group was able to raise 125.8 million,retaining a long-term management contract and control over the assets.The transaction was largely done at the latest reported
206、 NRV of the Group.The proceeds are earmarked to pursue new growth opportunities.Throughout last year we have been active on growing and progressing our pipeline,with the acquisition of two new hotels in Italy and Austria,the start of the redevelopment of anew hotel in Zagreb,and we are entering the
207、completion stages of a two-year redevelopment ofGrand Hotel Brioni in Pula(Croatia).With current trading impacted again by new government restrictions,at the end of the year the Groups hotels returned to reduced occupancy levels,albeit higher than those experienced in the previous lockdowns of the p
208、andemic.Operational PerformanceRevenueThe first six months of the year were dominated by world-wide lockdowns,amid a vaccine roll out programme.The Groups occupancy levels reached a record low in Q1 given these lockdowns and limited essential worker stays.From May onwards restrictions were progressi
209、vely eased across our operating markets and demand started to build up during the summer months.The Group was fortunate to secure an exclusive agreement for Park Plaza Westminster Bridge London to act as official player hotel for the 2021 Wimbledon Championships;furthermore the Group secured a contr
210、act to operate two hotels exclusively as part of the UK Governments hotel quarantine programme.These three exclusive contracts provided the UK with contracted business coming out of a lockdown period,enabling the Group to build up a revenue base.Pipeline growth and a solid financial position FINANCI
211、AL RESULTSKey financial statistics for the financial year ended 31 December 2021.Year ended 31 December 2021Year ended 31 December 2020Total revenue141.4 million101.8 millionRoom revenue84.4 million63.6 millionEBITDAR27.6 million(9.1)millionEBITDA25.1 million(10.1)millionEBITDA margin17.7%(9.9)%Repo
212、rted PBT(57.6)million(94.7)millionNormalised PBT(47.5)million(89.8)millionReported EPS(123)p(192)pOccupancy30.7%28.0%Average room rate117.0105.1RevPAR35.929.4EPRA NRV per share22.1522.08Adjusted EPRA earnings per share(44)p(123)pSTRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTS4445ANNUAL REPO
213、RT AND ACCOUNTS 2021PPHE HOTEL GROUPAPPENDICESTrading in Q3 benefited from pent-up demand after months of travel restrictions,particularly in Croatia,where revenue reached 93%of its 2019 levels in Q3.However,from late autumn demand and consumer sentiment was again affected by increased infection rat
214、es and enhanced government measures imposed across Europe to tackle the spread of the virus,followed by further strict government restrictions.After a period of two years trading in a pandemic,with multiple periods of trading under strict lockdowns or travel restrictions,the Group has significant le
215、arnings from booking cycles and trading patterns.Coming out of a period of government-restriction period,we notice a less severe impact to our occupancy compared to other lockdown periods and a quicker reverse of the downward booking trends seen after these restrictions were made.Reported total reve
216、nue for the financial yearincreased by 38.9%to 141.4 million(2020:101.8 million).Revenue recovered to39.5%of 2019 levels(2019:357.7 million)RevPAR was 35.9,up 22.1%(2020:29.4),and at34.6%of 2019 levels.Average room rate increased by 11.4%to 117.0(2020:105.1)andwas at 91.1%of 2019 levels.Occupancy im
217、proved to 30.7%(2020:28.0%),reflecting our focus on room rates.Predominantly the summer season in Croatia and the Q4 in the UK showed a rate profile exceeding 2019 on many occasions.EBITDA,profit and earnings per shareThe Group Reported EBITDA is 25.1 million(2020:(10.1)million),of which(14.0)millio
218、n relates to the first six months of 2021 and 39.1 million to the last six months of 2021.Due to the different periods of lockdown,comparing trading periods is increasingly difficult,however the Group believes its third quarter of 2021 was the least distorted trading-wise in terms of government rest
219、rictions,with an EBITDA of 33.7 million.This shows a 38.0%decline when compared tothe COVID-free 2019 trading period,when the Group delivered a54.4 million EBITDA in Q3.The hospitality industry is currently experiencing a challenging labour market as many hospitality workers have left the industry d
220、uring the second period of lockdowns in earlyin 2021,causing staff shortages in all our operating regions.Besides this,many European hospitality workers have left the UK during the pandemic,not being able to return due to a change in immigration rules,which adds to the already limited pool of availa
221、ble people.These staff shortages are causing inflationary pressures in payroll cost across all operating regions.The Group is mitigating these inflationary pressures with the implementation of automation,process improvement and centralisation of back office functions.Similar to 2020,the Group contin
222、ued toaccess government support and grants during periods where government restrictions were imposed and materially impacted the Groups normal trading.These support schemes helped to manage the fixed costs within the business during a period of severe revenue decline.In total,the Group received 29.7
223、 million(2020:34.1 million)of financial support in the year.Normalised profit before tax improved to(47.5)million(2020:(89.8)million).Reported profit before tax improved by 37.1 million to(57.6)million(2020:(94.7)million).Below is a reconciliation table from reported to normalised profit.In millions
224、12 months ended 31 December 202112 months ended 31 December 2020Reported(loss)profit before tax(57.6)(94.7)Net insurance proceeds received in relation to one of the Groups UK hotels(10.0)Execution of the sale and purchase agreement with the Republic of Croatia related to Guest House Riviera Pula1.5L
225、oss on buy back of units in Park Plaza Westminster Bridge London from private investors0.5Fair value adjustment on income swaps with private investors of Income Units in Park Plaza Westminster Bridge London0.3Settlement of legal claim3.1Results from marketable securities(0.1)Revaluation of finance l
226、ease3.63.4Revaluation of Park Plaza County Hall London Income Units(0.6)2.4Preopening expenses0.30.6Capital(profit)loss on disposal of fixed assets(1.0)1.5Impairment of property,plant and equipment and right-of-use assets4.45.3Business combination acquisition costs1.0Loan prepayment break costs0.5Re
227、valuation of share appreciation rights(1.7)Normalised(loss)profit before tax(47.5)(89.8)Financial reviewcontinuedReported basic/diluted earnings per sharefor the period were(123)pence(2020:(192)pence).Depreciation excluding impairment in the year was 38.9 million(2020:41.3 million).Depreciation is r
228、ecorded in accordance with IFRS,nevertheless internally we consider ourongoing average capital expenditure(CAPEX)over the lifespan of our hotels as a more relevant measure in determining profit,which in the hospitality industry is calculated as approximately 4%of total revenue.Our EPRA earnings numb
229、er set out on page 52 is calculated using the 4%rate instead of the reported non-cash depreciation charge.CAPEX,acquisitions and pipeline updateWhile the pandemic continued to cause operational disruption,we remained focused on implementing our strategy,progressing our development pipeline,and expan
230、ding our footprint into new,highly attractive markets.We progressed planned development projects,which include a new build hotel in Shoreditch,London(artotel London Hoxton),a repositioning of a hotel on the Croatian coast(Grand Hotel Brioni)and anoffice to the hotel conversion in the citycentre ofZa
231、greb.In our flagship artotel London Hoxton development,the buildings core is now reaching the17th floor of the total 27 floors.After expected completion in early 2024,this mixed-use development will have 343 large hotel rooms,5,900m2 of office space,a spa,gym,pool and multiple food and beverage outl
232、ets,including a stunning rooftop bar.The two-year HRK 260 million(30 million)repositioning ofGrand Hotel Brioni Pula in Croatia is nearing its completion and expected to open before the 2022 season.This luxury hotel features 227 rooms and is located ataspectacular location on the Verudelapeninsula.S
233、ummary of EPRA Performance indicatorsYear ended 31 December 2021Year ended 31 December 2020 millionPer Share millionPer Share EPRA NRV(Net Reinstatement Value)951.222.15960.822.08EPRA NTA(Net Tangible Assets)919.721.42924.421.24EPRA NDV(Net Disposal Value)857.519.97830.519.08EPRA earnings(17.5)(41)p
234、(40.6)(96)pAdjusted EPRA earnings(18.8)(44)p(52.1)(123)pIn Zagreb,interior demolition has started and works are underway to convert this former office into a 118-room luxury hotel in the city centre.This hotel will feature a rooftop pool that overlooks the entire city.Throughout the year the Group a
235、lso succeeded in acquiring two new hotels.One hotel is located in Nassfeld,Austria.This 4-star mountain resort includes 144 rooms and is located directly next to the ski lifts of the Nassfeld ski area,featuring 110 kilometres of slopes and excellent summer sports facilities.The hotel was acquired fo
236、r 12.8 million and complements the Groups leisure and outdoor segment.The resort is closely located to the Groups operations in Croatia and its seasonal operations will complement each other.The Group furthermore acquired a 4-star hotel in Rome.This hotel,acquired for 28.3 million,has 101 rooms and
237、is located in a prime central location in the city.The Group is planning a significant repositioning of the hotel to an upper upscale lifestyle offering,with opening expected in 2023.Together the above developments total a200+million plus active development pipeline of hotels in development or repos
238、itioning.Our owner/operator model enables us to have full control over the timing of the completion of this pipeline.Considering the challenging market conditions,the Group took the decision in summer 2020 to pause its project in New York until further notice.Real estate performance valuationsAs a d
239、eveloper,owner and operator of hotels,resorts and campsites,the Group has a real estate driven business model.Returns are generated by both developing the assets we own and operating our properties to their full potential,thus driving increased value for all stakeholders.Certain EPRA performance mea
240、surements are disclosed to aid investors in analysing the Groups performance and understanding the value of its assets and earnings from a property perspective.STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTS4647ANNUAL REPORT AND ACCOUNTS 2021PPHE HOTEL GROUPAPPENDICESThe basis for calculati
241、ng the Companys EPRA NRV for 31 December 2021 is set out in the table below:31 December 2021 million EPRA NRV (Net Reinstatement Value)EPRA NTA4 (Net Tangible Assets)EPRA NDV (Net Disposal Value)NAV per the financial statements278.5278.5278.5Effect of exercise of options6.26.26.2Diluted NAV,after th
242、e exercise of options1284.7284.7284.7Includes:Revaluation of owned properties in operation(net of non-controllinginterest)2636.1636.1636.1Revaluation of the JV interest held in two German properties(net of non-controlling interest)3.43.43.4Fair value of fixed interest rate debt(53.7)Deferred tax on
243、revaluation of properties(13.0)Real estate transfer tax317.2Excludes:Fair value of financial instruments(0.4)(0.4)Deferred tax(9.4)(9.4)Intangibles as per the IFRS balance sheet14.3NRV/NTA/NDV951.2919.7857.5Fully diluted number of shares(in thousands)142,93542,93542,935NRV/NTA/NDV per share(in)22.15
244、21.4219.971 The fully diluted number of shares excludes treasury shares but includes 585,867 outstanding dilutive options(as at 31 December 2020:1,196,996).2 The fair values of the properties were determined on the basis of independent external valuations prepared in December 2021.The properties und
245、er development are measured at cost.3 EPRA NTA and EPRA NDV reflect fair value net of transfer costs.Transfer costs are added back when calculating EPRA NRV.4 NTA is calculated under the assumption that the Group does not intend to sell any of its properties in the long run.Financial reviewcontinued
246、In December 2021,the Groups properties(with the exception of operating leases,managed and franchised properties)were independently valued by Savills(in respect of properties in The Netherlands,UK and Germany)and by Zagreb nekretnine Ltd(Zane)(in respect of properties in Croatia).Based on their valua
247、tions we have calculated the Groups EPRA NRV,EPRA NTA and EPRA NDV.The EPRA NRV as at 31 December 2021,set out in the table below,amounts to 951.2 million,which equates to 22.15 per share.The EPRA NRV was negatively impacted by the loss in the year of 52.1 million and positively impacted by a revalu
248、ation of 82.0 million.The positive revaluation follows an improved forward looking cash flow profile,with the expectation that the worst period of trading is in the past.In its cash flow forecast,the independent valuer assumes trading will be largely in line with 2019 in the year 2024.Discount and c
249、aprates used increased slightly in some instances,reflecting a higher inflationary environment and added risk profile due to the ongoing pandemic.In the summer of 2021 the Group completed a joint venture transaction with Clal Insurance,divesting a non-controlling 49%stake in two hotels in London.Thi
250、s transaction largely reflects the values that had been included in the Groups EPRA NRV as per 31 December 2020 and reconfirmed the externally valued NRV.mREAL ESTATE PERFORMANCENRV as of 31 December 2020960.8Revaluation 82.0Earnings(26.9)Foreign currencytranslation effects951.2NRV as of 31 December
251、 2021(52.1)(12.6)Other movements11 Includes other changes in equity,deferred taxes,and the effects of the exercise of options.The per share movement also includes the dilution effect as a result of options exercise.Per Share22.081.91(1.21)(0.00)(0.63)22.15STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIA
252、L STATEMENTS4849ANNUAL REPORT AND ACCOUNTS 2021PPHE HOTEL GROUPAPPENDICES31 December 2020 millionEPRA NRV(Net Reinstatement Value)EPRA NTA4 (Net Tangible Assets)EPRA NDV(Net Disposal Value)NAV per the financial statements309.6309.6309.6Effect of exercise of options13.213.213.2Diluted NAV,after the e
253、xercise of options1322.8322.8322.8Includes:Revaluation of owned properties in operation(net of non-controlling interest)2602.1602.1602.1Revaluation of the JV interest held in two German properties (net of non-controlling interest)3.23.23.2Fair value of fixed interest rate debt(84.5)Deferred tax on r
254、evaluation of properties(13.1)Real estate transfer tax318.6Excludes:Fair value of financial instruments(0.7)(0.7)Deferred tax(13.4)(13.4)Intangibles as per the IFRS balance sheet17.8NRV/NTA/NDV960.8924.4830.5Fully diluted number of shares(in thousands)143,52143,52143,521NRV/NTA/NDV per share(in)22.0
255、821.2419.081 The fully diluted number of shares excludes treasury shares but includes 1,196,996 outstanding dilutive options(as at 31 December 2019:412,290).2 The fair values of the properties were determined on the basis of independent external valuations prepared in December 2020.The properties un
256、der development are measured at cost.3 EPRA NTA and EPRA NDV reflect fair value net of transfer costs.Transfer costs are added back when calculating EPRA NRV.4 NTA is calculated under the assumption that the Group does not intend to sell any of its properties in the long run.Below is a summary of th
257、e valuation basis of our assets as at 31 December 2021.The property market value,the discount rate and the cap rate have been taken from the independent valuers report.RegionPropertiesProperty marketvalue millionDiscount rateCap rateUnited KingdomLondon6901.97.5%9.0%5.0%6.5%Provinces229.99.8%10.0%7.
258、3%7.5%The NetherlandsAmsterdam4238.58.0%9.8%5.5%7.3%Provinces235.99.8%9.8%7.3%7.3%Germany387.28.5%9.3%6.0%6.8%CroatiaHotels and apartments10139.79.0%10.0%7.0%8.0%Campsites8113.49.0%11.0%7.0%9.0%Others350.46.3%9.5%5.0%9.0%Cash flow and EPRA earnings2021 is the second consecutive year the Groups tradi
259、ng is heavily affected by the pandemic.Although the valuations reflect a forward outlook and expected recovery of the industry,the reported cash flow and earnings look backwards.The Group reported adjusted EPRA earnings of(18.8)million(2020:(52.1)million)and adjusted EPRA earnings per share of(44)pe
260、nce(2020:(123)pence).These negative earnings are in sharp contrast to the Groups 2019 EPRA earnings of 128 pence per share).In their valuations,valuators assess a return to 2019 trading in 2024.Financial reviewcontinuedGroups quarterly cash flow for 2021 millionQ1Q2Q3Q4TotalOperational cash flow(EBI
261、TDA and working capital)(8.2)3.031.7(0.8)25.7Investment in properties and new acquisitions(10.6)(17.5)(16.2)(57.5)(101.8)Debt service3(9.1)(11.5)(11.5)(18.0)(50.1)New facilities and movement in restricted cash16.418.38.128.170.9Loan repayments(40.4)(40.4)Joint venture transaction2125.8125.8Other exc
262、eptional items(including FX)(2.8)0.3(4.5)(0.5)(7.5)Total cash movement(14.3)78.07.6(48.7)22.6Cash and cash equivalents at beginning of period 114.299.9177.9185.5114.2Cash and cash equivalents at end of period 99.9177.9185.5136.8136.8Undrawn facilities at end of period169.060.077.276.876.81 The amoun
263、t of undrawn facilities as at 31 December 2021 and 30 September 2021 comprise of the 40 million undrawn amount under the CLBILS facility and the 20 million undrawn amount under the Park Plaza London Waterloo facility and 20 million undrawn amount under the working capital facility entered by Arena o
264、n 20 September 2021.The amount of undrawn facilities as at 30 June 2021 comprise of the 40 million undrawn amount under the CLBILS facility and the 20 million undrawn amount under the Park Plaza London Waterloo facility.The amount of undrawn facilities as at 31 March 2021 comprise of 17.0 million un
265、drawn amount under the CLBILS facility,14.8 million undrawn amount under the Park Plaza London Waterloo facility and access to 37.2 million undrawn amount under the artotel london hoxton facility which was cancelled due to the Group entering into a joint venture with Clal.2 Comprise of the 113.7 mil
266、lion cash received as part of entering into a long-term partnership with Clal,including the further cash injection of 12.1 million to fund the remaining equity commitments of the artotel london hoxton development project.3 Including leases,unit holders in Park Plaza Westminster Bridge London.STRATEG
267、IC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTS5051ANNUAL REPORT AND ACCOUNTS 2021PPHE HOTEL GROUPAPPENDICESFinancial reviewcontinuedThe main adjustment to the normalised profit included in the Groups financial statements is adding back the IFRS depreciation charge,which is based on assets at hist
268、orical cost,and replacing it with a charge calculated at 4%of the Groups total revenues.This represents the Groups expected average cost to maintain the estate in goodquality.The basis for calculating the Companys 2021 adjusted EPRA earnings is set out in the tablebelow:Reconciliation of reported ea
269、rnings to adjusted EPRA earnings12 months ended 31 December 2021 million12 months ended 31 December 2020 millionEarnings attributed to equity holders of the parent company(52.1)(81.7)Depreciation and amortisation expenses43.346.6Revaluation of Park Plaza County Hall London Income Units(0.6)2.4Change
270、s in fair value of financial instruments(1.7)0.2Non-controlling interests in respect of the above3(6.4)(8.1)EPRA earnings(17.5)(40.6)Weighted average number of shares(LTM)42,539,34042,466,006EPRA earnings per share(in pence)(41)(96)Company-specific adjustments:1Capital loss on buy-back of Income Uni
271、ts in Park Plaza Westminster Bridge London0.5Remeasurement of lease liability43.63.4Other non-recurring expenses(including preopening expenses)9(0.7)2.0Loan early repayment break costs13(see note 15b)0.5Business combination acquisition costs121.0Government settlement purchase of Hotel Riviera71.5Set
272、tlement of legal claim63.1Adjustment of lease payments5(2.3)(2.6)Insurance settlement10(10.0)One off tax adjustments8(3.6)(1.8)Maintenance CAPEX2(5.7)(4.0)Non-controlling interests in respect of the above32.3Company adjusted EPRA earnings1(18.8)(52.1)Company adjusted EPRA earnings per share(in pence
273、)(44)(123)Reconciliation company adjusted EPRA earnings to normalised profit before taxCompany adjusted EPRA earnings(18.8)(52.1)Reported depreciation11(38.9)(41.3)Non-controlling interest in respect of reported depreciation6.38.1Maintenance CAPEX25.74.0Non-controlling interest on maintenance CAPEX
274、and the company-specific adjustments(2.3)Adjustment of lease payments52.32.6One off tax adjustments83.61.8(Loss)/profit attributable to non-controlling interest(0.4)(12.2)Reported tax(5.0)(0.7)Normalised(loss)/profit before tax(47.5)(89.8)1 The Company-specific adjustments represent adjustments of n
275、on-recurring or non-trading items.2 Calculated as 4%of revenues,which represents the expected average maintenance capital expenditure required in the operating properties.3 Non-controlling interests include the non-controlling shareholders in Arena,third-party investors in income units of Park Plaza
276、 Westminster Bridge London and the non-controlling shareholders in the partnership with Clal that was entered into in June 2021.4 Non cash revaluation of finance lease liability relating to minimum future CPI/RPI increases.5 Lease cash payments which are not recorded as an expense in the Groups inco
277、me statement due to the implementation of IFRS 16.6 Relates to a settlement reached in a legal dispute in Croatia(see Note 25a in the annual consolidated financial statements).7 Execution of the sale and purchase agreement with the Republic of Croatia related to Guest House Riviera Pula(see Note 5d
278、in the annual consolidated financialstatements).8 Mainly relates to deferred tax asset recorded in 2021 and investment tax credit received in Croatia in 2020.(see Note 27f in the annual consolidated financialstatements)9 Mainly relates to profit and loss on disposal of property,plant and equipment10
279、 Net insurance proceeds received in relation to one of the Groups UK hotels.11 Reported depreciation excluding impairments.12 Business combination acquisition costs(see Note 3a and 3b in the annual consolidated financial statements).13 Loan early repayment break costs(see note 15b in the annual cons
280、olidated financial statements).Other EPRA measurementsGiven that the Groups asset portfolio is comprised of hotels,resorts and campsites which are also operated by the Group,a few of EPRAs performance measurements,which are relevant to real-estate companies with passive rental income,have not been d
281、isclosed as they are not relevant or non-existent.Those EPRA performance measurements include EPRA Net Initial Yield,EPRA Topped-up NIY,EPRA Vacancy Rate and EPRA Cost Ratios.Funding Throughout the pandemic,in the last two years,all our lenders have again been supportive by providing additional faci
282、lities,providing waivers on debt covenant testing and by waiving amortisation obligations.After reviewing forecast scenarios we have liaised again with our lenders and agreed postponement of financial covenant testing on trading until 2023.The Group is currently in compliance with respect to all its
283、 loan-to-value covenants.The Group increased a 30 million revolving credit facility,backed by the UK Government,to 40 million(fully undrawn at balance sheet date),and entered into a 20 million(16.8 million)working capital facility in Croatia(fully undrawn at balance sheet date).Post balance sheet it
284、 extended a 10 million(9.1 million)term facility,backed by the Dutch Government,with one year,now maturing in August 2024.All these facilitiesare secured with the Groups currentbanking partners.In addition,the Group signed a new 10.5 million(8.8 million)facility to fund the acquisition in Austria.Po
285、st balance it signed a25 million mortgage facility to fund the acquisition and planned refurbishment of thehotel inRome.The Groups total assets(properties at fair value)represent a value after the deduction oflease liabilities and unit holder liabilities.Accordingly,in the total loan-to-value(LTV)an
286、alysis of the Group,management considers the value of the freehold and long leasehold assets(net of these liabilities)compared with its bank funding(i.e.excluding the lease and unit holder liabilities),which management believes is the most accurate representation of the Groups total leverage positio
287、n.STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTS5253ANNUAL REPORT AND ACCOUNTS 2021PPHE HOTEL GROUPAPPENDICESThe Group reported a gross bank debt liability of 768.1 million(31 December 2020:757.4 million)and net bank debt of 618.0 million(31 December 2020:636.2 million).This reflects a net
288、 bank debt leverage of 33.6%(2020:37.1%).mNET DEBT31 December 2020636.2Increase in cash and cash equivalents(including deposits)(9.5)Amortisation existing facilities(12.6)Movement in capitalisedfinance expenses and foreign exchange618.031 December 2021(40.4)77.2AcquisitionsRepayment of loans(33.3)0.
289、4New facilitiesThe table below provides a further breakdown of the Groups bank debt position.Loan maturity profile at 31 December 2021(m)Total 1 year2 years3 years4 years5 yearsThereafter m768.138.822.116.557.0354.5279.2 Average cost of bank debt 3.1%Average maturity of bank debt 5.3 yearsKey charac
290、teristics debt for operating properties Limited to no recourse to the Group Asset backed Borrowing policy 5065%loan-to-value Portfolio and single asset loans 24 facilities with 12 different lenders Covenants on performance and value(facility level)Financial reviewcontinuedNet debt leverage reconcili
291、ation millionAs report in the annual financial statementEPRA NRV adjustmentEPRA NRV valuesBalance sheet PP&E1,236.0597.81,833.8Right-of-use asset215.9(215.9)-Lease Liabilities(251.6)251.6-Liability to income units in Westminster Bridge hotel (124.6)124.6-Net PP&E1,075.7758.11,833.8Intangible assets1
292、4.314.3Investments in Joint ventures4.36.510.8Other assets and liabilities,net(29.1)11.7(17.4)Total assets net of finance leases and excluding cash 1,065.2776.31,841.5Bank/institutional loans(short/long term)768.1768.1Cash&cash equivalent and restricted cash(150.1)(150.1)Net bank Debt618.0618.0Total
293、 capital 447.2776.31,223.5Capital and net debt1,065.2776.31,841.5Minority shareholders(168.7)(109.8)(278.5)Total capital employed PPHE shareholders896.5666.51,563.0Gearing ratio58.0%33.6%STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTS5455ANNUAL REPORT AND ACCOUNTS 2021PPHE HOTEL GROUPAPPEND
294、ICESCover ratiosICR1DSCR220210.4x0.2x2020(1.2)x(0.4)x20194.4x2.7x1 EBITDA,less unitholder and lease payments,divided by bank interest.2 EBITDA,less unitholder and lease payments,divided by the sum of bank interest and yearly loan redemption.OtherLong-term partnership with Clal Insurance(Clal)In June
295、,the Group entered into a long-term partnership with Clal,a leading insurance and long-term savings company,in respect of Park Plaza London Riverbank and artotel London Hoxton.As part of the transaction,PPHE received 125.8 million in cash and Clalwas granted 5 million share appreciation rights(SAR)t
296、o have a value upside if the gap between the Groups latest reported EPRA NRV and its current market price narrows over the maturity period.The SAR has a seven-year maturity with a strike price of 16 per share and the upside iscapped at 21 per share.Clal has also committed to a further cash injection
297、 of 12.1 million to fund its portion of the remaining equity commitments of the artotel London Hoxton development project.Clals investment,taking into account existing bank debt and remaining development costs,is based on a 263 million property valuation for Park Plaza London Riverbank and an all-in
298、 development budget cost of 279.3 million for the artotel London Hoxton project.These valuations are in line with the Groups reported NRV inDecember 2020.The Group remains the majority owner of the hotels by retaining a 51%controlling stake in one joint venture company holding(JVCo),and through its
299、management company has secured a 20-year hotel management agreement in respect of both hotels.Clal became a minority partner and owner of 49%of the shares in JVCo,holding indirectly the real estate and operations of these two properties.This agreement provided the Group with an opportunity to raise
300、liquidity on the back of its assets and leverage the equity invested in those assets,which is part of its strategy to have innovative ways in raising cash on the back of its balance sheet.Given the gap in the share price and the Groups NRV,management believes this method of raising liquidity is in t
301、he best interest of the Group.The additional liquidity will be recycled intothe business and used to pursue new growthopportunities and to support therecovery ahead.Financial reviewcontinuedDividendGiven the impact of the government restrictions due to the pandemic and theGroup receiving substantial
302、 government support during the year across our operating regions,the Board is of the view that it is neither sustainable,nor appropriate to propose a dividend in respect of the year2021.The Board appreciates the importance of dividends and will review dividend payments during the next half year repo
303、rting period,in line with the recovery trajectory,the receipt of government support and the business returning to cash flow positive trading.Should the analysis on the financial performance allow,the Board intends to reinstate its progressive dividend policy.The recent investments made in progressin
304、g and extending our pipeline should aid the Group in achieving a positive cash flow inthenear future.Daniel KosChief Financial Officer&Executive DirectorPark Plaza Westminster Bridge LondonSTRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTS5657ANNUAL REPORT AND ACCOUNTS 2021PPHE HOTEL GROUPAPPE
305、NDICESBusiness review Greg Hegarty Deputy Chief Executive Officer&Chief Operating OfficerWhat sets us apart is our strong sense of purposeIn my second year as the Groups Deputy CEO and COO I have been immensely impressed by our teams flexibility,commitment and passion shown.We ended 2020 filled with
306、 optimism for 2021,driven by the various vaccine developments which were widely seen as the way out of the pandemic.We all hoped that a short period of lockdown over the 2020/2021 winter period would allow us to reopen again early in the New Year.However,strict measures remained in place for a prolo
307、nged period of time and we were only able to reopen our UK portfolio fully in May,and on the continent this was even as late as June and July.In this interim period,however,we maintained many of our teams,made voluntary personal sacrifices and successfully secured several government andessential bus
308、iness travel agreements.Two of our hotels in the UK were included inthe UK Governments quarantine hotel programme,and they delivered an outstanding performance.Our teams workedday and night to prepare the hotels for welcoming guests who were required to isolate.The hotel teams had to constantly find
309、 a balance between delivering the contracted set of services and amenities,which were all geared around minimising guest contact,and offering a hospitableenvironment.As soon as restrictions were eased,demand returned quickly,driven by strong domestic leisure markets and several key sports events,suc
310、h as the Euros,Cricket and,most notably,The Championships,Wimbledon,for which our Park Plaza Westminster Bridge London was chosen asthe official host hotel for the players andsupport teams.When the time came to reopen our properties to the public,we were ready andfilled with excitement.Our teams wer
311、e expanded in line with demand and fully trained and reenergised.During these volatile and uncertain times,we welcomed back several hundred team members who“When the time came to reopen our properties to the public,we were ready and filled with excitement”were on furlough(or equivalent support progr
312、ammes in The Netherlands or Germany),we recruited and onboarded several hundred new team members and delivered the excellent guest experiences in which we take enormous pride.We can reflect on a strong summer for the UK properties and most notably in our Croatian portfolio where in July and August w
313、e delivered a record performance.The momentum experienced in summer unfortunately didnt last in continental Europe as several countries experienced yet another increase in infections,leading to the reintroduction of restrictions.The UK started introducing measures again towards the end of 2021.Howev
314、er,two years into the pandemic,every time measures are lifted we see an immediate pickup in demand for our properties.This gives us great confidence about the future of our industry and the prospects of our Group.As we entered 2020,we had just completed a 100 million investment programme and in 2021
315、 we continued to invest in our pipeline,we completed several acquisitions and upgraded properties.The quality,depth and locations of our portfolio,the excellent guest ratings and highly motivated teams will continue to drive our recovery.The pandemic,combined with the effects of Brexit in the UK,has
316、 had a significant impact on the availability of labour in the hospitality industry.Many hospitality professionals have pursued other careers and employee shortages across our sector have been widely reported.We are not immune to these trends but have benefited enormously from our earlier strategic
317、decision to employ our own accommodation services teams,reducing our exposure.Our in-house team has helped us to cope with the peaks in demand and was able to move between properties.In addition,our recruitment teams were extended,and several new strategies and initiatives were introduced to increas
318、e our talent pool.In my view,what sets our Group apart is our strong sense of purpose,which is built around creating valuable memories for our guests and value for our assets,people and local communities.2021 was another year where we placed these stakeholders at the centre of the decisions we made.
319、Our team members agreed and voted en masse for our Group to be recognised by The Caterer as the Best Employer in Hospitality.In light of the dramatic changes we have experienced as hoteliers and the ways we have had to adjust,I am humbled and feel privileged tobe working with so much talent.During 2
320、021 we engaged KPMG to help us sharpen our overall strategy,ensuring we continue to do what we do well,and explore further growth opportunities.Under the guidance of our Board and leadership team,we refined our corporate strategy,identifying strategic pillars and enablers.Our future focus remains ce
321、ntred around our owner/operator business model,leveraging our real estate ownership and expertise while growing our hospitality management platform.We are confident about our road torecovery and are excited about our pipeline,with several new openings and repositioning programmes planned for 2022,20
322、23 and 2024.I invite you to read more about our performance and various key developments in each of our operating markets in the section ahead.Greg HegartyDeputy Chief Executive Officer&Chief Operating OfficerSTRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTS5859ANNUAL REPORT AND ACCOUNTS 2021
323、PPHE HOTEL GROUPAPPENDICESProperty portfolio The Group has a well-invested portfolio consisting of approximately 3,200 rooms in operation in the upper upscale segment of the London hotel market,and approximately 1,100 rooms in its London development pipeline.Four of the Groups London hotels are in t
324、he popular South Bank area of London,with further properties in the busy Victoria,fashionable Marylebone and well-connected Park Royal areas.There are also three properties in the UK regional citiesof Nottingham,Leeds and Cardiff.2The Group has an ownership interest in nine properties:Park Plaza Wes
325、tminster Bridge London,Park Plaza London Riverbank,Park Plaza London Waterloo,Park Plaza County Hall London,2 Park Plaza Victoria London,Park Plaza London Park Royal,Holmes Hotel London,Park Plaza Leeds and Park Plaza Nottingham.Park Plaza Cardiff2 operates under a franchise agreement.Portfolio perf
326、ormance The quality and location of the Groups portfolio in London positioned it well to benefit from improved activity as restrictions were eased.Most of the Groups hotels in the UK(the Groups largest market)were closed from 6 January until 17 May 2021,in line with the UK Governments international
327、and domestic travel restrictions due to the pandemic.All restaurants and bars within properties were also closed,significantly impacting thefirst half performance.To help mitigate the impact of the property closures,the Group secured a commercial agreement with the Department of Health and Social Ca
328、re(DHSC)to provide temporary accommodation for individuals arriving from red-list countries.Park Plaza London Waterloo and Park Plaza Victoria London operated solely as quarantine hotels from May and July respectively.The DHSC set the service requirements to be provided by these hotels and was respo
329、nsible for theprovision of medical and security staff.The hotel team members had limited contact with guests during their stay.These agreements ceased in early November and both hotels reopened to the public.Furthermore,the Group was very proud to be selected as the exclusive Official Player Hotel f
330、or the Wimbledon Championships by the All England Lawn Tennis Club(AELTC).Park Plaza Westminster Bridge London accommodated all the players and their support teams.The hotel provided full-service hospitality including testing and recovery centres,gyms,hospitality desks forplayers and highly tailored
331、 nutritional food and beverage offerings.Together these commercial agreements provided the Group with alternative revenue streams during a period of property closures and low demand for non-essential stays.On 17 May restrictions were eased which allowed the Groups UK hotels to reopen and welcome bac
332、k guests for non-essential travel.Thereafter,activity levels and booking pace gradually improved,with demand primarily generated by domestic leisure guests.This trading momentum continued into the second half aided by the return of international travel,which resulted in both strong revenue generatio
333、n and recovery in average room rates during Q3,in line with the Groups rate-driven strategy.Corporate travel and meetings and events continued to grow month-by-month in the second half,albeit demand remained behind 2019 levels,and several events,such as awards dinners,took place in Q4.Booking pace slowed down from the second half of November due to the emerging of the Omicron variant.Total reporte
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