Hospitality and pub group Whitbread has asked landlords for a 50% rent cut for the next three months as pandemic restrictions continue to hit trading.
As hotels and pubs were closed over lockdown, the group has suffered from a fall in revenues and incurred large losses during the first half of 2020.
Whitbread which operates more than 800 hotels in the U.K. and Ireland, as well as restaurant brands Beefeater, Brewer’s Fayre, Cookhouse & Pub, Bar + Block Steakhouse, Thyme and Table Table announced earlier this year 6,000 job cuts.
In the six months ended 27 August, the group posted a £660.5m loss. This is a 483.6% fall in profits to the £172.2m in profits Whitbread made in the previous year.
In a letter sent to all its landlords, Mark Anderson, managing director, property & international at Whitbread said it is calling on its “landlords, who have been the only stakeholders not to have shared some of the pain to date, to provide a proportionate degree of temporary financial support.”
“Premier Inn has been notable in the sector for continuing to meet its rental obligations throughout the pandemic, and Anderson takes a clear dig in the letter at rivals that have already reneged on rental payments.”
“Throughout this period, we have however continued to pay all our landlords our rent commitments in full, even when our sites were closed for over 12 weeks during the first lockdown period. This is in stark contrast to some of our competitors, some of whom have received the benefit of rent reductions through a CVA process,” he said.
A spokesperson for Whitbread said, “Since the start of the COVID-19 pandemic, Whitbread has taken decisive action to ensure that our cost base reflects the low levels of demand, with the support of a wide range of stakeholders including shareholders, lenders, colleagues and suppliers. The actions we have taken, combined with the strength of the Premier Inn brand and our leading customer proposition mean that we continue to trade ahead of the market.
“Throughout the pandemic to date, we have paid our rent commitments in full, even when our hotels and restaurants were forced to close. With ongoing Government restrictions expected to result in subdued market demand into the first half of 2021, we are now asking our landlords to support us, as other stakeholders have during the pandemic, through a reduction in rent for the December quarter in recognition of the current environment. The business had arrived at this decision ahead of the most recent Government update on Saturday 19 December.”