Premier Inn owner says it is doing better than rivals as sales rise
Whitbread told investors it was outperforming other brands in the midscale and economy sector – referring to more affordable hotels.
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Your support makes all the difference.The owner of Premier Inn has said it has continued to do better than its low-cost rivals as demand for hotel rooms in London and across the UK has stayed strong.
Whitbread told investors it was outperforming other brands in the midscale and economy sector, referring to more affordable hotels.
Total accommodation sales in the UK rose by 11% in the three months to the end of November, compared with the same period a year before.
And revenue per available room for Premier Inn UK, an important measure for hotels of sales performance and how many rooms are being filled, was up 9% year on year.
Chief executive Dominic Paul said this was achieved because of “high levels of occupancy and strong pricing” across its more than 800 Premier Inn hotel rooms in the UK.
The average room rate was £82.30 in the latest quarter, down from £90.01 over the previous three months.
In London, average prices were considerably higher at £115.78.
Whitbread, which also owns food brands including Beefeater and Bar + Block, also revealed that food and beverage sales grew by 6% year on year.
The company provided an update on its expectations for inflation this year, which in recent years has driven up costs for firms in the leisure and hospitality industry.
UK cost inflation will sit between 3% and 4% over the next financial year, it said.
It’s likely Whitbread will benefit from the migration of cash-strapped consumers towards the affordable end of the spectrum
Mr Paul said: “We continue to execute against our strategic priorities at pace and given the structural shift in UK hotel supply, positive current trading, a clear commercial plan and our ongoing focus on driving cost efficiencies, we remain confident in the outlook.”
Julie Palmer, a partner at Begbies Traynor, said the update eases any concerns that the “cheap-and-cheerful hotel owner might struggle to find the right balance between upping prices and staying competitive”.
She added: “After a bumper Christmas period, it will be interesting to see how demand holds up in 2024, but for many trading up into a more expensive hotel will remain out of the question, so it’s likely Whitbread will benefit from the migration of cash-strapped consumers towards the affordable end of the spectrum.”