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Whitbread keeps growing despite ‘weaker than expected hotel market'

21 June 2016 by
Whitbread keeps growing despite ‘weaker than expected hotel market'

Hospitality giant Whitbread has seen continued growth in the first quarter of its financial year, despite a "weaker than expected hotel market".

The company, which owns the Premier Inn hotel chain and Costa coffee brand, enjoyed total sales growth of 8% during the 13 weeks to 2 June, with like-for-like sales for the whole group up 1.8%.

Premier Inn saw a 2.1% uplift in like-for-like sales over the period, but restaurants were more sluggish at 0.2%. Total sales at Premier Inn were up 8% and climbed 1.4% in restaurants.

Meanwhile Costa saw 2.6% like-for-like sales growth and 11.5% total sales growth over the same period.

Whitbread chief executive, Alison Brittain (pictured) said: "Whitbread delivered total sales growth of 8.0% in the first quarter as we continue with a relentless focus on our customers, innovation and investing in our strong brands. Costa has started the year well and Premier Inn continues to win share, albeit in a weaker than expected hotel market.

"Industry data has continued to show a soft hotel market in the UK, particularly in London. During the quarter Premier Inn grew total sales by 8.0% and like-for-like sales by 2.1%, which benefited from our substantial hotel extension programme.

"Against a strong comparator Premier Inn like-for-like revpar declined by 0.5% and total revpar declined by 1.2%. This reflects the market environment, the expected dilution of the impact of the extension programme and the c.3,600 new rooms added in the final quarter of last year, which will mature over the next few years. We are on plan to open 4,000-4,500 new hotel rooms in 2016/17."

Whitbread also plans to open 230-250 Costa stores worldwide and aims to install "at least" 1,250 new Costa Express machines this year.

Whitbread employs around 50,000 people in 2,300 outlets across the UK.

In the year ended 3 March 2016, Whitbread PLC reported a 12% increase in group revenue to £2.9b and underlying profit before tax of £546.3 million, up 11.9%.

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