Whitebread, the parent company of hotel chain Premier Inn,
has announced its intention to enter into consultation on restructuring
proposals that could see up to 6,000 redundancies across its hotel and restaurant
staff, representing 18 per cent of its total workforce.
The company said the majority of its hotels and restaurants
in the UK had reopened with new cleanliness protocols by the start of August following the easing of
restrictions by the government to curb the spread of coronavirus. It said it
saw strong demand in its Premier Inn brand, with occupancy levels steadily
improving and averaging 51 per cent in August. Restaurant performance was also
boosted by chancellor Rishi Sunak’s Eat Out to Help Out scheme, driving total
accommodation and F&B sales to reach 38.5 per cent of the previous year’s
figures in August.
Meanwhile, all six of the Premier Inn properties in Germany that
were operational before the lockdown reopened in May, alongside 13 of the
Foremost hotels Whitbread had acquired, which were fully refurbished and
rebranded during the lockdown and reopened when restrictions lifted.
In the first two weeks of September, the company said its
accommodation sales remained ahead of the market, with business bookings
growing, “albeit from a low base”. While September and October typically see an
increase in business travel activity, Whitbread said “it is too early to assess
the impact of Covid-19” on the period. Local lockdowns across the UK and the
potential for further national restrictions will be monitored closely,
according to the firm.
With market demand expected to remain low in the short to
medium-term, Whitbread said it needed to take action to protect the business by
lowering its cost base and implementing “a more flexible operating model”. The
firm is hoping the majority of the redundancies can be made voluntarily. It
said the closing of the government’s furlough scheme at the end of October was
partially a factor in its decision to reduce its headcount.
In addition, Whitbread is cutting is head office staffing
levels by 15 to 20 per cent.
Other steps the company has taken to secure its financial
position include accessing government schemes, cancelling and postponing
non-critical spend and completing a £1 billion rights issue.
Alison Brittain, CEO of Whitbread, commented: “With demand
for travel remaining subdued, we are now having to make some very difficult
decisions… In line with our longstanding values of treating our people fairly,
our priority is now to ensure that this process is clear and transparent for all
colleagues and that everyone impacted is supported throughout.”