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Whitbread, which owns Premier Inn and Costa coffee has posted UK like-for-like sales growth of 0.3%, which “reflects recent tougher market conditions”.
In the 13 weeks to November 30 2017, the Premier Inn brand saw growth of 5% “driven by investment in new hotel capacity”.
In comparison Costa posted 7.2% growth in the third quarter thanks to “Costa Express expansion”.
Alison Brittain, Whitbread CEO, said: “We have made good progress in executing our strategy and have grown group sales so far this year by 6.8%. This growth, combined with the results from our group-wide efficiency programme, means that we are on track to achieve expectations for the full year.
“Premier Inn UK achieved total hotel sales growth of 5.5% in the quarter as we continued to deliver our strategy to win market share through investment in new hotels and extensions, which will mature to give strong returns over the next few years.
“During the third quarter, there were signs of market weakness, most notably in London, with year-on year declines in both occupancy and average room rate.
“Our performance in the quarter moderated as the budget hotel market weakened and we had a particularly challenging October.”
She added that the Costa high street stores in the UK are “highly profitable and generate strong returns”, but weak retail market footfall is negatively impacting high street stores’ like-for-like performance. She added: “We expect this to continue for some time.”
In the report it stated that Premier Inn has added more than 10,000 rooms over the last two years, representing a more than 15% increase in capacity, and is also confident of increasing its capacity to 85,000 rooms by 2020.
The remaining 13,700 rooms will be secured through a mix of extending existing hotels, new freehold developments and new leasehold hotels.
