Hotel Brands

Whitbread profits fall amid ‘challenging market conditions’

Premier Inn owner Whitbread has reported a 5.6% drop in pre-tax profits as “challenging market conditions” caused by brexit have dented its bottom line.

For the first half of the year Whitbread reported adjusted profit before tax of £251m down from £266m the previous year. It also recorded a 0.1% drop in revenues to £1.078bn as its total UK accommodation sales declined 0.6% and like-for-like accommodation sales declined 3.6%, impacted by “continued weak regional market conditions”.

The company revealed that its “confidence” in the long term opportunities in the German market has grown and that its expansion plans in Germany are “firmly on target”. Its German pipeline has increased 25% to 7,280 rooms over the last year and it said it “continues to look for ways to accelerate our ambitions”.

Alison Brittain, Whitbread chief executive officer said that the company has delivered a “resilient first half profit performance” despite the challenging market conditions in the UK, where she said shorter-term trading conditions in the UK regional market, particularly in the business segment has been difficult”.

She said: “We are enhancing and optimising our UK hotel network and have successfully trialled new higher specification ‘Premier Plus’ rooms in two hotels, with fantastic customer feedback. We are on track to have 500 Premier Plus rooms this year, with ambitions for a total of 2,000 over the next year.

“We have also made good progress in delivering our ambitious efficiency targets, helping to offset part of the ongoing industry-wide inflation. Whilst the near-term market conditions in the UK remain uncertain, we have confidence in the long-term structural opportunities available in the domestic budget travel markets in the UK and Germany.”

She added: “Following successful completion of our return of surplus capital programme, we still have a strong balance sheet, providing support for ongoing disciplined deployment of capital, which will deliver growth over the longer term.”

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