Hotel Brands

Whitbread beats expectations but warns of ‘tight’’ labour market

It also said that UK total food and beverage sales ‘recovered well’ throughout FY22 and into FY23 and are approaching pre-Covid levels

Premier Inn Owner Whitbread has revealed sales for the three months to June have beaten expectations but warned of the effects of a “tightening” labour market.

It confirmed like-for-like sales for the period increased 21.3% compared with the same period in 2019 with total UK accommodation sales up 31%.

It also said that UK total food and beverage sales “recovered well” throughout FY22 and into FY23 and are approaching pre-Covid levels.

However it said that given a “tight” labour market and its focus on maintaining “market leading” position, it plans to invest additional costs of £20m – £30m in labour, refurbishments and IT in FY23.

Despite this it said due to its “high levels” of occupancy and continued strong sales performance it remains “confident” in its continued margin recovery in the UK

In addition, Whitbread revealed that since the lifting of restrictions, the German hotel market – where it has focused on expanding its presence recently, recovered “more strongly than expected” and Premier Inn occupancy levels were 64.7% in the last four weeks of the quarter. Its German open estate now stands at 40 hotels.

Alison Brittain, Whitbread CEO, said: “The strength of Premier Inn’s recovery in the UK continues to be ahead of expectations with a particularly strong Q1 performance that is well ahead of pre-pandemic levels and we continue to significantly outperform the market.

“This outperformance is driven by a number of factors, including our commercial and operational focus as well as the strength of our brand and operating model, our direct distribution, national coverage and accelerated independent supply contraction.”

She added: “In Germany, our open hotel estate now stands at 40 hotels, with a further 38 hotels in the pipeline. The quality and prime location of our hotels are proving highly attractive and are driving high customer scores. The trading performance of our more mature hotels in the two months post the lifting of Covid restrictions only reinforces our positive view of the significant opportunity in Germany.

“This impressive Q1 performance together with improved visibility into Q2, gives us increased confidence in delivering a strong first half and remaining ahead of the market for the rest of the year.”

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