Economic uncertainty hits sales at Premier Inn
Whitbread has blamed “weak trading conditions” in the UK economy for a slowdown in sales.
The company, the largest hotel operator in the UK, said sales at Premier Inn properties open at least a year fell by 4.6 per cent in the first quarter of the year.
Total sales fell about one per cent, the company said in a statement to markets.
As political and economic uncertainty continued, the regional business market was less confident, the firm said.
Alison Brittain, Whitbread chief executive, 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.”
The trading update is the first since Whitbread sold the Costa Coffee chain to the Coca-Cola company.
The near £4 billion deal completed on January 3rd.
Whitbread said it intended to return up to £2.5 billion of the sale proceeds to shareholders, “unless more value-creating opportunities arise and subject to prevailing market conditions”.
Premier Inn operates more than 785 hotels and 72,000 rooms.
Whitbread said its expansion of the hotel chain in Germany was “firmly on target”.
Brittain explained: “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: “While 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.”
Whitbread also owns Beefeater, Brewers Fayre and Table Table.