A rise in occupancy and ADR helped pushed sales for Dublin-based aparthotel operator Staycity Group up 2.4% in the year to July 2019.
The fast-expanding Staycity, which now operates nearly 3,000 apartments across 12 European cities, has seen occupancy grow by 2.2% in the first half of the year, to an average of 86.4% across the group, with UK properties seeing a 2.5% increase to 85.8%.
Tom Walsh, the group’s co-founder and CEO, said despite the challenging year, the performance of Staycity demonstrates ‘the strength of demand’ for the product as the company continues to expand across Europe.
He also admitted that a hard Brexit would impact GDP and
soften demand for hotel accommodation, creating ‘significant headwinds’ which
the company must prepare for.
“The challenges in the UK are well documented
and although we are encouraged by the increase in occupancy for our UK-based
properties, we are already witnessing a softening of demand for corporate
travel,” he said.
“Over 65% of our revenues are currently generated in the UK and we believe a hard Brexit will impact GDP and consequently reduce demand for hotel accommodation, this along with a devaluation of sterling is likely to create significant headwinds which we must prepare for.
“Fortunately, we do not have a large food operation and our team turnover is significantly below the industry average, therefore a rise in input inflation and any immediate restriction on European migration will have less of an impact on Staycity than other businesses in the hospitality sector.”
In its full-year results for 2018 Staycity reported a 14% rise in turnover to €68.3m, boosted by a hike in average occupancy from 82% to 84% and a rise in ADR from €109 to €110.59 rose 4.2% year-on-year to €93.21 while group EBITDA rose 12% to €8.1m.
Despite concerns over Brexit Staycity is anticipating an 18% rise in turnover to €81m for 2019, and an 11% boost in EBITDA to €9m.
Over the past few weeks Staycity has opened sites in Venice Mestre and Paris Marne-la-Vallée, with properties in Berlin and Edinburgh coming on stream before year-end and a 224-apartment property due to open in Manchester’s Northern Quarter at the beginning of 2020. In what has been the company’s biggest recruitment drive to date, some 200 staff have been appointed to operate the new properties.
Further property signings have been announced in London, Dublin, Berlin and Frankfurt, amounting to 500 apartments in major UK cities and 850 apartments in Germany.