Whitbread reports strong trading as Premier Inn bounces back post-Covid

The owner of Premier inn, the UK's biggest hotel brand, Whitbread has published its Q1 results, showing sales are ahead of expectations.

The group has shown continued market outperformance in the UK with Premier Inn total accommodation sales 27.2pp ahead of the market, driven by the strength of its commercial and operational initiatives, combined with the inherent strengths of the brand, scale and direct distribution.

UK hotels continue to perform well ahead of pre-COVID levels:
> Total UK accommodation sales 235.6% ahead vs FY22 (31.0% ahead vs FY20)
> UK LFL accommodation sales 221.6% ahead vs FY22 (21.3% ahead vs FY20)

Whitbread said that its UK food and beverage sales were 585.3% ahead vs FY22 (4.3% behind vs FY20).

Given a tight labour market and the group's focus on maintaining its market leading position, it plans to invest additional costs of £20m to £30m in labour, refurbishments and IT in FY23. However, high levels of occupancy and continued strong sales performance means Whitbread remains confident in our continued margin recovery in the UK.

Since the lifting of restrictions, the German hotel market has recovered more strongly than expected and Premier Inn occupancy levels were 64.7% in last four weeks of the quarter. The open estate now stands at 40 hotels.

The company has replaced its existing debt facility with a new £775m five-year revolving credit facility.

CEO Alison Brittain (pictured) commented, 'The strength of Premier Inn's recovery in the UK continues to be ahead of expectations with a particularly strong Q1 performance that is well ahead of pre-pandemic levels and we continue to significantly outperform the market.

'This outperformance is driven by a number of factors, including our commercial and operational focus as well as the strength of our brand and operating model, our direct distribution, national coverage and accelerated independent supply contraction.

'In Germany, our open hotel estate now stands at 40 hotels, with a further 38 hotels in the pipeline. The quality and prime location of our hotels are proving highly attractive and are driving high customer scores. The trading performance of our more mature hotels in the two months post the lifting of COVID restrictions only reinforces our positive view of the significant opportunity in Germany.'

Alison closed, 'This impressive Q1 performance together with improved visibility into Q2, gives us increased confidence in delivering a strong first half and remaining ahead of the market for the rest of the year.'