PPHE Hotel : announces its unaudited Interim Results.

1 September 2021

PPHE Hotel Group Limited

("PPHE" or the "Group")

Unaudited Interim Results for the six months ended 30 June 2021

Improving demand during the second quarter

PPHE Hotel Group, the international hospitality real estate group which develops, owns and operates hotels and resorts, announces its unaudited interim results for the six months ended 30 June 2021 (the "Period").

Further significant progress

• Secured a contract to operate two hotels exclusively as part of the UK government's hotel quarantine programme, and secured an exclusive agreement for Park Plaza Westminster Bridge London to act as official player hotel for the 2021 Wimbledon Championships
• Unlocked £113.7 million of equity at the Group's latest NAV through a long-term partnership with Clal Insurance ("Clal"), providing financial headroom for future growth opportunities and to support recovery
• Continued progress on £200+ million development pipeline to enhance long-term growth, which includes flagship developments art'otel london hoxton and Hotel Brioni in Pula, Croatia. In Croatia, construction of a hotel in Zagreb is expected to start in September (opening Q4 2022), detailed planning is underway for the repositioning of a hotel in Pula, and another campsite has been earmarked for repositioning
• Multiple actions taken to attract and retain talent in a highly competitive labour market and recognised as 'Top-6Best Places to Work' and shortlisted for the 'Best Employer' by The Caterer, a leading UK hospitality industry trade publication, which will further strengthen the Group's position for recruitment.

Financial performance and strong cash position

• Total revenue in H1 was £25.8 million (H1 2020: £61.9 million, which included a pre-COVID January and February). In Q2, total revenue was £20.4 million, up 95.8% vs Q2 2020
• EBITDA loss limited to £14.0 million in H1 through decisive actions to mitigate the impact of the COVID-19 pandemic ("pandemic") (H1 2020: loss of £3.3 million, which included a pre-COVID January and February). In Q2, EBITDA was £(3.9) million, up 42.4% vs Q2 2020
• EPRA NRV per share* at 30 June 2021 was £20.85 (31 December 2020: £22.08)
• EPRA Earnings per share (LTM) was £(1.34) vs 31 December 2020: £(0.96). Adjusted EPRA
  earnings per share (LTM) was £(1.35) vs 31 December 2020: £(1.23)
• Financial position is strong, with £237.9 million cash available at 30 June 2021, which consists of consolidated net cash of £177.9 million, and further access to undrawn facilities of £60 million

1. EPRA NRV and EPRA NRV per share were calculated based on the independent external valuations prepared in December 2020.

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Well positioned for recovery

• Majority of properties in operation, following a prolonged period of lockdowns and temporary closures since the onset of the pandemic
• Occupancy in the Group's key cities is currently dominated by domestic leisure demand as air travel is still subdued
• Positive booking trends continued into July and August in the UK, the Netherlands and Germany, again driven by predominantly domestic leisure activity
• In Croatia, July and August performance exceeded expectations, with the aggregrate revenue during this key demand period at approximately 90% of the revenue generated in the same period in 2019
• In the UK, the Group is encouraged by the increasing number of meeting and event enquiries, which are at the highest level since the start of the pandemic and demonstrate the demand when markets stabilise, albeit enquiry levels are still some way behind 2019
• The Group's well-invested portfolio together with its agile owner-operator model and strong track record provides a solid foundation for further recovery

Commenting on the results, Boris Ivesha, President and Chief Executive Officer, PPHE Hotel Group said:

"We were delighted to welcome back guests to our properties and see improving demand as restrictions eased across our markets in Q2 following a long period of lockdown measures and ongoing domestic and international travel restrictions which impacted trading in the period. In the period, we secured some exclusive contracts across several of our London properties and our flagship Park Plaza Westminster Bridge London was the proud host hotel for the players and support teams of the Wimbledon Championships. We also continued to make progress on our £200+ million development pipeline and through a partnership on two London properties we were able to unlock £113.7 million of equity at the Group's latest NAV to grow our Group to further increase our financial flexibility and support our recovery.

"Post period end, we have seen the increasing trend for leisure demand continue, while the number of enquiries for meetings and events in the UK is at the highest level since the pandemic started. In Croatia we have reported a strong July and August performance, with revenues at approximately 90% of those generated during the same period in 2019."

Enquiries
PPHE Hotel Group Limited	Tel: +31	(0)20 717 8600
Daniel Kos, Chief Financial Officer & Executive Director
Robert Henke, Executive Vice President of Commercial Affairs
Hudson Sandler	Tel: +44	(0)20 7796 4133
Wendy Baker/ Lucy Wollam / Nick Moore	[e-mail]

Notes to Editors

PPHE Hotel Group is an international hospitality real estate company, with a £1.7 billion portfolio, valued as at December 2020 by Savills and Zagreb nekretnine Ltd (ZANE), of primarily prime freehold and long leasehold assets in Europe.

Through its subsidiaries, jointly controlled entities and associates it owns, co-owns, develops, leases, operates and franchises hospitality real estate. Its primary focus is full-service upscale, upper upscale and lifestyle hotels in major gateway cities and regional centres, as well as hotel, resort and campsite properties in select resort destinations.

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PPHE Hotel Group benefits from having an exclusive and perpetual licence from the Radisson Hotel Group, one of the world's largest hotel groups, to develop and operate Park Plaza® branded hotels and resorts in Europe, the Middle East and Africa. In addition, PPHE Hotel Group wholly owns, and operates under, the art'otel® brand and its Croatian subsidiary owns, and operates under, the Arena Hotels & Apartments® and Arena Campsites® brands.

PPHE Hotel Group is a Guernsey registered company with shares listed on the London Stock Exchange. PPHE Hotel Group also holds a controlling ownership interest in Arena Hospitality Group, whose shares are listed on the Prime market of the Zagreb Stock Exchange.

Company websites:

www.pphe.com|www.arenahospitalitygroup.com

For reservations:

www.parkplaza.com|www.artotels.com|www.arenahotels.com|www.arenacampsites.com

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BUSINESS & FINANCIAL REVIEW

BUSINESS REVIEW

In the first six months of 2021, the ongoing challenges presented by the pandemic continued to cause severe disruption to the global hospitality sector, with government imposed domestic and international travel restrictions and social distancing measures in place for much of the period. Consequently, as expected, the Group's trading in the first half was severely subdued due to the majority of its hotels either temporarily closed or operating at reduced capacity.

However, our proactive strategy resulted in the Group securing various Essential Business arrangements across several of its London properties, including its current support to the UK government's hotel quarantine programme at two of its hotels. In addition, our flagship Park Plaza Westminster Bridge London was the proud host hotel for the players and support teams of the 2021 Wimbledon Championships.

In Q2 2021, travel restrictions were progressively eased across the Group's operating markets. In the UK, all the Group's hotels were reopened to guests on 17 May, in line with the UK government's roadmap, and from June restrictions were gradually eased across Continental Europe. By the end of the second quarter, all the Group properties (except for Park Plaza Amsterdam Airport and art'otel budapest) were open and trading for the first time since the onset of the pandemic. Booking demand is gradually improving with short lead times.

Demand across all regions has been predominantly leisure focused, with provincial cities and resort destinations proving to be more popular than capital cities. In the UK, due to the restrictions on international travel, leisure demand is largely from the domestic market which, also prior to the pandemic, is historically the Group's largest source market. With measures easing and sports events once again being allowed we were well placed to benefit from demand associated with events such as the 2020 UEFA European Football Championships and the Cricket Hundred Series. The Group has also seen an increased level of enquiries from the business travel and meeting planner sectors for the Group's meetings and events offer in the UK.

Across Continental Europe the Group has seen greater signs of international leisure travel recovering and we are particularly pleased with our Croatian subsidiary's performance during the summer months, welcoming guests from many European source markets.

With the vaccination programmes firmly underway across all our operating regions, the increased acceptance of lateral flow and PCR testing and vaccination passports introduced across Europe, the Group expects the positive demand trends to continue gaining momentum.

Despite the challenges during the Period, the Group maintained a strong financial position and made further progress in line with its long-term growth strategy. It entered into a long-term partnership with Clal, which unlocked £113.7 million of equity and advanced on its £200+ million development pipeline, all of which demonstrates the Group adaptability to ever-changing prevailing market conditions.

Furthermore, the Group meticulously prepared for the reopening of properties by leveraging its well- invested estate, flexible owner operator model and broad customer appeal, including by enhancing its technological capabilities, and re-engaging with team members to ensure the continued delivery of the high-quality and memorable guest experience that is synonymous with the Group.

As widely reported, the hospitality industry is going through fundamental changes in terms of employment and the Group is no exception. However, the Group's strong focus on leadership and development initiatives, for which it has won numerous awards in recent years, has resulted in the Group being recognised in the 'Top-6 Best Places to Work in Hospitality' awards by The Caterer, the UK's leading hospitality trade publication. This award showcases the very best places to work in what has been an incredibly difficult time for the sector caused by the pandemic. We are therefore especially proud of our continued investment in our people, and the on-going care and support we provide to all our team members.

Further details are set out below and in the Financial Performance, and the Review of Operations.

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Long-term partnership with Clal

In June, the Group entered into a long-term partnership with Clal, a leading insurance and long-term savings company, in respect of Park Plaza London Riverbank and art'otel london hoxton. As part of the transaction, PPHE received £113.7 million in cash and Clal was granted 5 million share appreciation rights ('SAR') to have a value upside if the gap between the Group's latest reported EPRA NAV and its' current market price narrows over the maturity period. The SAR has a 7-year maturity with a strike price of £16 per share and the upside is capped at £21 per share. Clal has also committed to a further cash injection of £12.1 million to fund its portion of the remaining equity commitments of the art'otel london hoxton development project. Clal's investment, taking into account existing bank debt and remaining development costs, is based on a £263 million property valuation for Park Plaza London Riverbank and an all-in development budget cost of £279.3 million for the art'otel london hoxton project.

The Group remains the majority owner of the hotels by retaining a 51% holding in one joint venture company holding ("JVCo") and through its management company has secured a 20-year hotel management agreement in respect of both hotels. Clal became a minority partner and owner of 49% of the shares in JVCo, holding indirectly the real estate and operations of these two properties.

The agreement provides the Group with additional liquidity to pursue new growth opportunities and to support the recovery ahead.

Development pipeline

Good progress was made in the Group's £200+ million development pipeline, which includes flagship developments such as art'otel london hoxton and Hotel Brioni Pula in Croatia.

In the UK, construction progressed at art'otel london hoxton, the Group's largest development project. The new 27-storey building will accommodate 343 hotel rooms and suites, five floors of office space, gym, swimming pool, wellness facilities and art gallery space. The project is expected to complete by 2024.

art'otel london battersea power station, which is to be operated by the Group under a long-term management agreement, is expected to open during the first half of 2022.

Excellent progress was made at Hotel Brioni in Pula to reposition the property as an upper upscale 227- room, full-service hotel. The Group is evaluating the optimum time to reopen and relaunch the property as Grand Hotel Brioni Pula, which is expected to be during the 2022 summer season.

Also in London, plans were prepared for two further development projects: (i) a mixed-use scheme including a 465-room hotel, adjacent to Park Plaza London Park Royal; (ii) work is in progress for a planning application to develop a mixed-use scheme, including a hotel at 79-87 Westminster Bridge Road.

In September 2021, following a period of design and planning, the Group is expected to commence construction of its property (under a 45-year lease agreement) in the centre of Zagreb, Croatia at an estimated cost of €16 million. The Group will operate the hotel when the property is relaunched as a luxury hotel (expected Q4 2022).

The Group's longer term project pipeline includes a development site in New York and two repositioning projects in Pula, Croatia.

Operational update

The Group has demonstrated throughout the pandemic the ability to generate revenue from those sectors of the market which were still travelling, including securing Essential Business travel arrangements.

In the UK, the Group entered into a commercial agreement with the Department of Health and Social Care ("DHSC") to provide temporary accommodation for individuals returning from 'red-list' countries, which provided the Group with an alternative revenue stream. Park Plaza London Waterloo and Park Plaza Victoria London have operated solely as quarantine hotels since May and July respectively. The

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