Soaring demand for cheap hotel rooms drove sales at Whitbread in the last quarter, the leisure chain announced today.
At £33.50 per share the FTSE 100 company was trading 1.2% higher on the day.
Whitbread — which owns the Premier Inn hotel chain and Brewers Fayre pub portfolio — announced that group accommodation sales were up 23% during the 13 weeks to 1 June. Food and beverage turnover meanwhile increased 12%.
As a result, total sales rose 19% year on year or 15% on a like-for-like basis.
Premier Inn Shines
In the UK, Whitbread described trading at Premier Inn as “outstanding” during the last quarter. Accommodation sales rose 18% during the period and on a like-for-like basis were up 16% year on year.
Trading was driven by “strong demand from both business and leisure guests across the Regions and London,” the company said. Revenues per available room (RevPAR) increased 16% year on year, and 40% from the same period in 2020.
Whitbread added 348 new rooms across the UK and Ireland during the period, it said, and remains on course to add a total of between 1,500 and 2,000 rooms during the current financial year.
Food and beverage sales in the UK improved 10% in the last quarter. But Whitbread said that “trading at the value end of the pub restaurant market remains challenging.”
The business also said that market conditions in Germany continued to improve in the quarter. Accommodation sales here rose 129% in the period, while like-for-like revenues improved 66%. RevPAR rose 45% year on year.
Whitbread currently operates 56 hotels in Germany and has another 32 in the pipeline. It is set to open between 1,000 and 1,500 rooms this year.
“Impressive Revenue Growth”
Chief executive Dominic Paul said that “in the UK, our market leading brand and value-led customer proposition is continuing to deliver impressive revenue growth and a healthy RevPAR premium versus the wider [midscale and economy] market.”
He added that “the structural reduction in hotel supply, coupled with strong consumer demand, is highlighting the strengths of our differentiated business model, as evidenced by our continued strong performance.”
Whitbread described forward booked revenue in the UK as “well ahead of last year.” It also said that it remains “on course” in Germany to break even on a run-rate basis during the 2024 calendar year.
The FTSE firm said that “the strength of our overall performance and forward booked position has increased our confidence in being able to deliver a strong first half result.”
“On A Roll”
Mark Crouch, analyst at social investing network eToro, said that “Whitbread is on a roll and continues to perform strongly among the midscale and economy hotel segment… The pandemic devastated the travel industry, but it has recovered now.”
He noted that “due to the cost-of-living crisis, it’s clear that travelers and holidaymakers are seeking out good quality but also good value, something which is key to Whitbread’s business model. It’s that focus that will allow the firm to continue to outperform its rivals.”
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