Premier Inn owner Whitbread has returned to profit after being boosted by a strong recovery and “improving” business travel demand in the UK.
The parent company of the European budget hotel chain, which operates more than 800 properties in the UK and Germany, said that it had made a pre-tax profit of £58.2 million for the year ending on 3 March 2022, compared with a loss of £1 billion in the 2020-2021 financial year.
Over this period, revenue for the group nearly tripled to £1.7 billion in its 2021-22 financial year from just £589 million in the previous year.
Alison Brittain, Whitbread’s CEO, said: “As restrictions eased after the first quarter, high levels of leisure demand and improving business demand helped drive UK accommodation sales ahead of pre-Covid levels throughout the summer and into autumn, with sales remaining resilient through the fourth quarter despite the emergence of the Omicron Covid variant.”
The company added that trading in the seven weeks to 21 April 2022 “remains well ahead of the market”, with bookings up 327 per cent on the same period last year and 30 per cent above pre-Covid levels.
Whitbread said that it expected to benefit from an “acceleration in the exit of independent operators from the UK market”, which would give Premier Inn “further opportunity” to take market share. Premier Inn already has 82,000 rooms in the UK.
The chain is set to add between 1,500 and 2,000 rooms in the UK over the next 12 months, as well as opening another 2,500 rooms at properties in Germany.
“We hold a uniquely advantaged position in the UK market as the largest operator with the strongest brand, alongside our direct distribution, best-in-class operating model and broad customer reach,” added Brittain.
“This, combined with the evidence of an acceleration of supply contraction within the independent hotel sector, presents Premier Inn with the opportunity to accelerate its market share gains, an opportunity on which we are fully capitalising as we continuously strengthen our customer offer.”
Brittain said that the hotel market in Germany was “recovering at a slower pace than the UK due to the higher level of government restrictions which have lasted longer”.
“However, we have no reason to believe the market won't come back strongly in due course,” she added. “With our open hotel estate now standing at 37 hotels [in Germany], all now branded Premier Inn, with a further 41 hotels in the pipeline, the foundations of a successful business are already in place.”
Premier Inn said earlier this year that it would be increasing hotel rates to help offset the impact of rising inflation and it now expects hotel sector costs to go up by 8 to 9 per cent this year – around 1 per cent higher than in its previous update.