Whitbread Reports Strong Trading for Q1

Premier Inn owner Whitbread posted a jump in first-quarter sales on Thursday as it said consumer demand in the UK has remained strong.

In the 13 weeks to 1 June, total revenue was up 19%, with UK revenue up 16% and a 124% increase in Germany. Like-for-like sales growth was 14% and 63%, respectively.

Total UK accommodation sales were 18% higher versus the same period a year earlier, while LFL accommodation sales were up 16%.

Whitbread said consumer demand in the UK has remained strong and Premier Inn delivered an “excellent” operational and financial performance.
Whilst there was good revenue growth in both the regions and London, demand was particularly strong in London.

In Germany, meanwhile, Whitbread said the recovery in market demand continued during the first quarter.

The group said the strength of its overall performance and forward booked position has “increased our confidence in being able to deliver a strong first half result in FY24”.

Chief executive Dominic Paul said: “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.

“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. Our forward-booked position into Q2 underpins our confidence in being able to deliver a strong first-half result.”

He continued: “Our business is in great shape and trading well. Given the lack of branded supply growth and permanent decline in the independent sector, I am confident our business model will continue to deliver as we strengthen Premier Inn’s position in the UK, unlock our potential in Germany and maximise long-term returns for our shareholders.

Julie Palmer, Partner at Begbies Traynor, said: “In the face of significant disruption, Whitbread continued to expand its footprint during the pandemic and the benefits of this long-term strategy are on show this morning.

“Sales in its hotels business are up over 20% and in a world where consumers are feeling the pinch more than ever, the no-frills proposition from Premier Inn will look more appealing than ever as inflation continues to run rampant and dent consumers’ spending power.

“Even the company’s bars and restaurants business is in fine fettle with sales up over 10% in the first quarter and with rumours circulating that a significant chunk of this part of the business is up for sale, shareholders will be looking on with interest and hoping for a decent price.

“Like the rest of the hospitality sector, inflation will be driving up costs but with the company’s size, it is much better placed to deal with cost rises than many smaller rivals, and could even get a boost if these pressures overwhelm competitors lacking Whitbread’s scale.”