Whitbread set for hotel sales after profit fall

13 May 2004 by
Whitbread set for hotel sales after profit fall

Up to £200m of Whitbread's Marriott hotels could be sold off this year, following a review of the business.

Whitbread announced the review after operating profit across the upscale hotels fell by 10% to £71.5m in the 12 months to 4 March.

Along with entering into sale-and-management agreements on several of the hotels, the group is also expected to put its collection of three-star Courtyard by Marriott hotels up for sale following completion of the review.

Analysts said the 11 Courtyard hotels were unlikely to fetch more than £55m because of their locations, which include Coventry, Milton Keynes and Northampton, and their size - eight of the 11 have fewer than 100 bedrooms. They added that although the sale made sense for Whitbread, finding a buyer could prove difficult.

Even Harrell Hotels, which signed a deal with US-based Marriott International to develop the Courtyard brand in the UK, is not interested in the hotels. Paul Harris, director of development, said the group was focused on developing the business through new-build hotels, not acquisitions.

Whitbread said it would concentrate its capital expenditure this year on its budget Travel Inn and David Lloyd Leisure businesses. In the 12 months to 4 March, Travel Inn recorded a 3.6% increase in like-for-like sales to £230m and an 11% increase in operating profit to £74m.

Across Whitbread as a whole, which includes the Beefeater restaurants, turnover (excluding disposals) increased by 4.8% to £1.8b, with pre-tax profit up by 4.6% to £211.7m.

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