Whitbread sees ‘divergence' between London and regional hotel markets

03 March 2016 by Janet Harmer

Whitbread has started to see a "divergence" between the London and regional hotel markets, according to its latest trading update for the 50 weeks to 11 February 2016.

Across the group, Whitbread's total sales increased by 10.4% for the 50-week period, with like-for-like sales up 3.2%.

Whitbread's Premier Inn hotel division saw an increase of 11.1% in total sales and like-for-like sales up 4.4% in the 50-week period. In the 11-week period, total sales were up 7.3% and like-for-like sales rose by 2.2%.

Total occupancy for the 50 weeks stood at 81.1%, and total room nights sold increased by 7.4% to 17 million.

Whitbread noted a "divergence in performance" in the quarter between its regional and London hotel markets. In the regions, Premier Inn grew total sales by 8.3%, with a 6.8% increase in rooms available. Total and like-for-like revpar grew by 1.5% and 1.4% respectively, and regional occupancy remained high compared with the rest of the market, at 70.6%.

The hotel market in London was "softer", with Premier Inn growing total sales by 3.6% in the quarter, with an 8% increase in rooms available. The brand's total London revpar and occupancy were down, by 3.6% and 1.5 percentage points respectively, broadly in line with the wider market. Occupancy remained steadfast at 76.1%. Total London market revpar declined by 3.3%, while revpar for the midscale and economy sector was down by 2.2%.

Meanwhile, coffee brand Costa's total sales over the period were up 14.2%, with like-for-like sales up by 3%. But an unusually warm winter saw like-for-like sales rise by just 0.5% in the 11 weeks to 11 February. Total sales for the 11-week period were up 10.5% thanks in large part to new openings.

In its restaurants division, sales for the 50-week period were up 2.2%, and like-for-like sales increased 1%. Total sales in the 11-week period were up 3.1%, and like-for-likes increased 2.3%.

Alison Brittain, chief executive of Whitbread, said: "Whitbread has had another good trading period, delivering year to date total sales growth of 10.4% and like-for-like sales growth of 3.2%. We expect to report full year profit in line with expectations.

"In the quarter, Premier Inn had a good performance growing total sales by 7.3% with occupancy rising by 0.3% pts to 71.4% and rooms available increasing by 6.9%. Like-for-like sales grew by 2.2%, which is ahead of our like-for-like revpar growth at 0.4%, as we benefited from our substantial, higher returning, hotel extensions programme. Costa had good total sales growth of 10.5% and like-for-like sales growth of 0.5%, reflecting lower footfall on the high street and an unusually warm winter.

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