Premier Inn operator Whitbread will cut up to 6,000 jobs after reporting a year-on-year decrease in sales of more than 75% in the first half of the year, due to the closure of properties during the Covid-19 lockdown.
The budget hotel group said it predicted demand would remain low in the short- to medium-term, confirming it would enter into redundancy consultations with 18% of its total workforce.
Results for H1, the 26-week period ended 27 August 2020, saw a 77.2% fall in total UK sales, across both accommodation and food and beverage.
Premier Inn has now reopened 98% of its estate in the UK and reported strong demand in tourist locations, but more subdued activity in metropolitan areas and the capital. Occupancy across the group's UK hotels averaged at 51% in August with total sales for the month down 38.5% year-on-year.
Alison Brittain, chief executive, said: "With demand for travel remaining subdued, we are now having to make some very difficult decisions, and it is with great regret that today we are announcing our intention to enter into a consultation process that could result in up to 6,000 redundancies in the UK, of which it is hoped that a significant proportion can be achieved voluntarily. In line with our longstanding values of treating our people fairly, our priority is now to ensure that this process is clear and transparent for all colleagues and that everyone impacted is supported throughout.
"We will continue to focus on the safety of our guests and teams and the continuity of our business. Maintaining our financial flexibility alongside our leading operating model and powerful brand will allow Whitbread to pursue enhanced long-term structural growth opportunities both in the UK and Germany. This will leave us in a position of strength to continue to invest, increase market share, support our colleagues, guests and suppliers and create value for shareholders."
In response to the crisis Whitbread has also completed a £1b rights issue and has almost finalised a restructuring among head office staff, which will see a 15%-20% reduction in headcount.