PPHE boss: London hotels are being held up by planning delays

The boss of PPHE Hotel Group has said London is becoming less attractive to developers due to planning delays.

Greg Hegarty, who is co-chief executive of the hospitality real estate company, said its recent projects had been slowed down by red tape.

Earlier this year, PPHE’s plans for a 186-room hotel in Westminster Bridge Road (pictured) were held up in an appeals process that lasted for six days.

Hegarty said this cost PPHE, which is behind the Art’otel hotels in London’s Hoxton and Battersea Power Station, a “significant amount of money”.

PPHE has since secured planning approval and is now hoping to deliver the project within the next three years, having originally purchased the site in 2019 for £12.5m.

Hegarty welcomed the new government’s commitment to introduce planning reform and said it was “absolutely needed”.

“We will progress in London if reform changes, or we have schemes which are favourable,” he added.

Future PPHE hotel developments

It comes after the soft opening of PPHE’s flagship Art’otel London Hoxton in May, which followed the London debut of the brand at Battersea Power Station in February 2023.

Hegarty said the opening of the 357-room hotel had been delayed due to “certain supply chain issues” around sourcing parts of the façade from China and some of the furniture from Europe.

He added: “We opened with the art gallery, the auditorium, the spa and a select number of rooms in April. By the end of Q3, we’ll be up to 330 rooms, so the hotel will pretty much be completed. We then have all of the presidential suites and destination restaurants coming online in Q4.”

The property also has 5,000 sq m of office space, which is due to welcome a “premium co-working provider”.

“That sector has been very unpredictable lately, especially if you are looking at coworking versus normal rental, but we’re hoping to announce a supplier and an operator soon, and that will then start activating the office space by H1 2025,” Hegarty added.

Hegarty said there were more opportunities in London to convert existing office space to hotels rather than build new sites from the ground up.

PPHE saw like-for-like growth in occupancy from 69.1% in H1 2023 to 72% in H1 2024, which was supported by the gradual return of corporate travel and increased demand for groups, meetings and events.

Hegarty said corporate bookings had dropped in frequency but tended to be for longer stays, while demand for meetings and events had “come back to normalised patterns”.

PPHE reported a 10.9% boost in EBITDA during the period, while RevPAR in the UK fell slightly from £150.50 to £146.70.

Meanwhile, total revenue growth was up 4.3% to £187.8m, compared to £180m the previous year.