Premier Inn owner warns cost inflation likely to exceed previous expectations
Premier Inn owner Whitbread has warned cost inflation is expected to exceed previous expectations reaching 8-9% in the next year.
It is planning to offset the increase with "cost efficiencies, estate growth and pricing power", extending a programme aimed at delivering savings of £140m between FY22 and FY25.
The budget hotel group reported "significant market outperformance in the UK" with FY22 revenue 189% above FY21. Profit before tax for the year stood at £58.2m, marking a return to profit for the brand.
Premier Inn accommodation sales for FY22 were 198% above the previous year, with food and beverage sales 170% up. Full year accommodation sales remain 12% behind pre-Covid levels, however sales in H2 exceeded pre-Covid levels. The brand said food and beverage sales have been slower to return.
Alison Brittain, Whitbread CEO, said: "Our operational performance throughout the year was outstanding and testament to the hard work and dedication of our employees, adapting at short notice to the implementation of Government restrictions, while at all times ensuring the safety of our customers. The summer period in particular saw very high levels of demand in our hotels, with many continuously at full occupancy. Our teams really stepped up, and I am extremely grateful for their commitment and effort during this period.
"Whilst our hotel performance was excellent, the value pub and restaurant sector in which we operate has seen a slower recovery post reopening in May 2021. We are seeing an improvement in our UK restaurants performance, and we are confident the commercial initiatives we have recently launched will help drive a further improvement in sales."
The company said it had been bolstered by £126.5m from government Covid support schemes in the last year, compared to £260.3m in FY21.
The group said it has seen an acceleration in the exit of independent accommodation operators from the UK market, presenting opportunities to expand its market share. It plans to add 1,500 to 2,000 rooms in the UK in FY23.
