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Alan Parker – bringing Whitbread into focus

07 August 2008 by
Alan Parker – bringing Whitbread into focus

Alan Parker is chief executive of Whitbread, one of the UK's largest hospitality players. Since assuming his role he has radically restructured the business around its budget hotel brand Premier Inn and rapidly growing coffee chain Costa. Gemma Sharkey caught up with a man on a mission

Last week Whitbread completed a long-predicted asset swap with pub operator Mitchells & Butlers. Whitbread unloaded 44 pub-restaurants where permission to bolt on a Premier Inn had been refused and acquired 21 Express by Holiday Inn branded hotels, ready for conversion to Premier Inn status, in exchange.

It is just the latest step in a journey initiated by Whitbread chief executive Alan Parker in 2004, when he took up the role which he describes as "the best job in the country". Since that time the once-sprawling leisure conglomerate has exited from its UK Marriott franchise, jettisoned high-street brands Pizza Hut and the long-established TGI Friday's, and worked up a sweat disposing of fitness chain David Lloyd.

It has seen Parker - who joined Whitbread in 1992 as managing director of its hotels division - transform the £2m division into the UK's largest, and fastest-growing, hotel chain, with 550 sites and turnover last year of £527.8m.

In February the Premier Inn owner announced the amalgamation of its hotel and restaurant businesses, with a number of job losses and the departure of Mark Philips, managing director of the redundant restaurants division.

Parker readily admits the need to be ruthless at times. "I think it is difficult to imagine a chief executive without a touch of ruthlessness," he said.

However, the move, along with a logistics outsourcing deal with Kuehne & Nagel, is forecast to save Whitbread a whopping £25m a year by 2009.

Parker has plans to grow Premier Inn from its current 38,000 bedrooms to 55,000 bedrooms in the next four years, with six new sites, equivalent to 1,200 rooms, due to open in the capital alone in the next three years.

The chief executive is adamant that the group is nowhere near saturation point. "We started this financial year with 36,000 rooms, so our plan is for a 50% increase. I believe there is plenty of opportunity to at least achieve that, and we'll look and see how much more we can do when we have."

Internationally, the group has 80 hotels planned for India, with eight sites for development already purchased, and launches pencilled in for next year.

Other international locations in Parker's sights include the Gulf region. Parker says he "wouldn't rule out China", but the company has no plans to enter the market at the moment despite its Costa brand already being there.

"We're focusing on the Gulf because it's a mature hotel market with a lot of four- and five-star hotels and very little budget sector."

Although Whitbread's focus has shifted unashamedly to its hotels and coffee business, Parker refutes the suggestion that its remaining pub-restaurants could be up for sale.

"Although there's significant challenge in the future, I see Beefeater and Brewers Fayre as absolutely vital to Whitbread. Our core model is a site with a Premier Inn and one of our restaurants," said Parker.

New concepts

While the rapid growth of Costa continues, with the chain recently celebrating its 1,000th opening, in Moscow, Whitbread is not averse to trying new things, and new pub-restaurant concepts Table Table and Taybarns have seen the light of day this year.

In an increasingly hectic world it is clear that Parker has no intention of slowing down. "I get enthusiastic simply imagining where we could be in a few years from now. My job is to make sure it happens."

Read more on Premier Inn at www.caterersearch.com/premierinn

Whitbread in numbers

Whitbread employs more than 33,000 people and serves 8.5 million customers every month in its 1,600-plus outlets across the UK.

  • Premier Inn 38,000 bedrooms in 550 locations in the UK, and one hotel in Dubai
  • Costa More than 750 shops in the UK, and 1,051 Costa outlets in 23 countries worldwide
  • Beefeater 126
  • Brewers Fayre 131
  • Table Table 102
  • Taybarns Two sites in the UK (from September)

Alan Parker on…

Midmarket hotels

"I think there will always be a future for sensibly priced, well-run hotels, it's just that there are a number of hotels that are probably past their sell-by date out there."

Food inflation

"We were expecting an inflation of around 3% this year, but we're seeing about 8% food cost increases. We're absorbing a lot of it and have also re-priced, while talking to suppliers about how we can buy better, but I'm loath to pass big increases on to customers."

Tourism

"Tourism is a great success in this country. We've created a lot of jobs and a lot of value for shareholders in tourism companies. Consequently, the Government takes the view that this is an industry that doesn't need a lot of help. I think that's the wrong attitude."

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