Firmdale Hotels' UK arm reports £7m pandemic loss

The UK subsidiary of Firmdale Hotels reported a loss of more than £7m in 2020 as coronavirus restrictions forced the closure of its eight London properties.

The company, which was founded in 1985, has a portfolio including the Ham Yard hotel and Soho hotel in London. The group said income "collapsed to a trickle" in March 2020 as lockdown measures were introduced.

Filings for the 12 months to 31 January 2021 show revenues slumped to £19.7m across its eight hotels, just 18% of the prior year.

Pre-tax loss was £7.28m compared to £469,000 profit the previous year . No dividend was paid for the period, compared to £2.3m in the prior year.

Combined average occupancy in Firmdale’s hotels was 12.2% in 2020, a 75% decline on the previous year, while average room yield dropped 86% to £49. Revenue across its food and beverage outlets also fell 80% to £8m.

Conversion of hotel revenues to gross operating profit declined 40% from the prior year to an operating loss.

Filings state directors took advantage of government support such as business rates relief to help the company to continue, as well as securing further financial backing. Over the past 18 months Firmdale raised £44m of additional funds from new and existing lenders, and £50m from an interest-free convertible loan note.

Directors warned that if coronavirus restrictions were reintroduced which closed all or a number of its hotels, there would be a "material uncertainty" over its ability to continue as a going concern.

However, Firmdale said it has seen high levels of demand in its restaurants and "signs of recovery" in its accommodation business since coronavirus restrictions have eased. “The trading outlook continues to improve with each successive month,” according to directors.

The company is "seeking further development opportunities" in London, although no specific projects have been secured.

Firmdale is also behind the Crosby Street hotel and the Whitby hotel in New York.