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Resilient business travellers buoy Action Hotels' earnings

Action said it had not been affected by the recent terrorist attacks or global economic turbulence.
Resilient business travellers buoy Action Hotels' earnings
One of Action's partners

Budget hotel group Action Hotels’ (LON:AHCG) underlying profits jumped by more than 40% in 2015 as the number of rooms its operates in the Middle East and Australia rose 54%.

Because it focused on business travellers, Action added it had not been affected by the recent terrorist attacks or global economic turbulence.

“Businesses become increasingly cost conscious and are looking for affordable quality mid-scale hotels which offer better value for money for their employees.”

Sales in 2015 increased by 16%, operating profit was 18% higher with underlying profits [EBITDA] approximately 42% better.

Net assets will also rise due to new hotel openings and higher values attributed to the existing hotels.

Over the year, the group opened the Inn Sharjah, ibis Seef Bahrain and acquired the ibis Budget Melbourne Airport.

The number of operating rooms is now 1,561.

The Tulip Inn Ras Al-Khaimah, Action’s largest hotel development so far, and the 367-room Ibis Styles Brisbane are both due to open in the current quarter.

In total, six new hotels are due to open this year, to take the portfolio to 2,537 operational rooms and 15 hotels by the end of 2016.

Action added it currently trades at a 45% discount to its net asset value but its focus on three and four star accommodation puts in a robust position. 

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