Action Hotels (LON:AHCG) saw a solid increase in revenue per available room – RevPAR, a key industry metric – at its operational hotels in 2014.
The operator of mid-market hotels in the Middle East and Australia said RevPAR rose 3.7% to US$84 in 2014 from US$81 in 2013.
Both of its hotels in Kuwait enjoyed occupancy rates in excess of 80%, while across the hotel portfolio occupancy rates continue to be in line with management's expectations.
Gross operating profit from its hotels – the group has six operational hotels and eight in development – increased by more than 20%.
At present, the total number of rooms across the hotel portfolio is 1,488, which is a 32% increase year-on-year; this number is set to rise to 2,835 rooms by 2017, a number that 319 higher than the target published in the group’s stock market listing prospectus.
Action’s nominated adviser (nomad), finnCap, said the update confirmed a good performance from the operating hotels in 2014.
“We, and indeed management, are focused on the growth potential and Action has detailed that following recent openings the operating room count is now up 32% on 2014 and the pipeline of a further eight hotels will add another 91% by 2017. We believe this planned growth at least underpins our target price of 110p (72% upside),” the broker said.
Shares in Action Hotels were down 2.6% at 57p in lunchtime trading.