Whitbread said this was predominantly due to “declining business confidence”, impacting short-lead bookings. It revealed that in London, significant room additions of 9.4% over the last year contributed to Premier Inn’s total accommodation sales growth of 1%.
Like-for-like accommodation sales declined 4.2%, reflecting “weaker market conditions”. Despite this Whitbread said London “continues to be a good long-term market with strong demand and high occupancy levels”, and added it will look to add further capacity to its offering.
However, the company said the regional market continues to be impacted to a greater extent by declining business confidence, with total accommodation sales for the regional midscale and economy market declining 1.5% in the first quarter.
Whitbread also added that although forward bookings look positive, caution remains on the UK hotel environment given “ongoing political uncertainty” and the impact this has on business confidence.
During the quarter it revealed 282 new rooms were added in the UK, with 3,000 to 3,500 rooms expected to be added during the financial year.
Alison Brittain, Whitbread CEO, said: “We have delivered a resilient performance in the first quarter despite more challenging market conditions and we continue to make good progress with our efficiency programme, which is helping to partially offset another year of high industry cost inflation.
“Our expansion into Germany is firmly on target. Our new hotel opening in Hamburg is performing above our expectations and our hotel in Frankfurt continues to perform well. We will open another two organic sites during this financial year and complete the first tranche of the 19-hotel Foremost Hospitality acquisition, with 13 being rebranded to Premier Inn in the first half of next year.”
She added: “Whilst we are cautious about short-term market conditions, we are confident in our plans given the significant growth opportunities in the UK and internationally. Given our strong balance sheet, efficiency programme and robust business model, we are in a strong position and we will continue to invest in order to maintain Premier Inn’s competitive advantages and to capitalise on our structural growth opportunities.”