Boutique hotel group Firmdale booked record revenue and profits last year as tourists flocked back to London following the end of pandemic restrictions.
Firmdale owns two properties in New York and eight in London including Soho’s Ham Yard Hotel and the Charlotte Street Hotel in Fitzrovia which is a bolthole for celebrities such as Daniel Craig and John Travolta.
Accounts due to be filed this week show that the average room rate across its London hotels soared by 15.4% to a staggering £568 in the year to 31 January 2023 thanks to an influx of wealthy travellers.
It led to Firmdale’s revenue almost doubling to £192.6m which comfortably exceeded its pre-pandemic high of £169.8m in 2019. In contrast, its costs only increased by 49% to £165m last year and, after interest payments, this left Firmdale with a £13.4m net profit, up from an £11.4m loss in 2022.
“In London the financial year 2022/23 was characterised by a tremendously strong recovery as international travel was re-established, and by March 2022 revenues were already outperforming pre Covid levels. The upward trend continued throughout the year,” says Firmdale’s finance director Malcolm Soden.
North American tourists represented 47% of Firmdale’s guests last year followed by 23% from the UK, 16% from Europe and the remainder coming from the rest of the world. They paid a premium to travel after two years of restrictions though others were put off by the higher prices. Testimony to this, occupancy at Firmdale’s London hotels increased by 28 points to 72% last year but was down on the pre-pandemic high of 87% in 2019.
It still outperformed the competition last year as the overall London luxury segment reported average occupancy of 62.7% and room rates of £443.29 according to hospitality analysts CoStar.
The positive trend has continued into 2023 as the accounts state that “the trading results for the first six months of the new financial year are slightly ahead of budget and the outlook for the remainder of the year and beyond remains positive.”
The accounts add that the business hasn’t been affected by rising interest rates as 67% of its £387.7m debt has fixed terms. It includes a £130.2m loan from Wells Fargo which was due during 2023 giving Firmdale net current liabilities of £87.2m.
However, Soden says that “our option to extend the term has been exercised and the formalities with the bank are well advanced.”
