Whitbread sales boosted by buoyant hotel market

(Adds CEO, analyst comments, details, shares)

By Neil Maidment

LONDON, Sept 9 (Reuters) - Britain's Whitbread (LSE: WTB.L - news) said buoyant demand at its Premier Inn hotels and stronger growth at its Costa Coffee arm helped send second-quarter underlying group sales up 6.8 percent.

Total (NYSE: TOT - news) sales including new sites for the 11 weeks to Aug 14 rose 12.8 percent, Britain's biggest hotel and coffee chain operator said on Tuesday, with business at its Premier Inn arm benefiting from an improving economy and extra trade from the Farnborough Airshow and Scotland's Commonwealth Games.

"The hotel market is buoyant and is benefiting from an economic recovery," Whitbread Chief Executive Andy Harrison told Reuters, highlighting regions in particular. "We've had a really good summer. All parts of the company have performed well."

Underlying sales at Premier Inn, which has about 85 percent of its rooms outside of London, rose 9.2 percent in the period, with group revenue per available room (RevPAR), a key industry measure, up 8.6 percent and total occupancy at an all-time high.

Whitbread has grown rapidly in recent years due to demand from cost-conscious customers for affordable hotels and an increasing trend for takeaway coffee which has driven growth at its Costa chain.

The firm said it remained on track for another good year and to open around 4,500 new Premier Inn rooms and 300 net new Costa stores as part of ambitious growth plans at home and abroad.

Underlying UK sales at Costa Coffee rose 7.3 percent in the period, the company said, improving on growth of 4.5 percent in the first quarter, whilst its restaurant division, which includes Brewers Fayre and Beefeater brands, outperformed the wider market with sales growth of 1.7 percent.

Overseas Costa sales for the 24 weeks grew 9.3 percent.

"Whitbread's half year pre-close update is very strong and may lead to some upgrades in consensus numbers," said Numis analyst Wyn Ellis, who has a "hold" rating on the stock.

Shares (Frankfurt: DI6.F - news) in the FTSE 100-listed firm, which have risen 39 percent in a year, were up 0.2 percent to 4,407 pence at 0801 GMT, valuing the business at around 8 billion pounds. (Editing by Kate Holton and Mark Potter)