The chain, whose advertising campaign is fronted by British comedian Lenny Henry, saw revenue per available room tumble 9.6% in a tough market.
However, Whitbread's pub restaurant division increased like-for-like sales 2%, while like-for-like sales at coffee chain Costa climbed 2.6%.
In a statement, Alan Parker, chief executive of Whitbread, said early action had been taken to reduce costs in the business, and said the group remained on track to deliver total savings of £25m by 2011.
The group also launched Premier Offers this month, with hotel rooms from £29 per room per night.
By Gemma Sharkey
E-mail your comments to Gemma Sharkey here.
Looking for a new job? Find your next hotel job here with Caterersearch.com jobs