Premier Inn owner Whitbread (WTB.L) shares slid on Tuesday after it posted a 79.4% slide in total sales in the three months to the end of May.
The company was one of the biggest fallers on Britain’s FTSE 100 (^FTSE) after it revealed the toll of the coronavirus and lockdown on its hotels and restaurants. Whitbread was trading 4.4% lower at around 9.30am in London.
It has now begun reopening hotels, with 270 of its 800 Premier Inn branches and 24 restaurants now open. The remainder of its operations, including Beefeater, Brewers Fayre and Table Table, will open throughout July.
It said it had seen “good demand” for the summer in traditional regional tourist destinations. The trading update said keeping 39 hotels open for key workers during lockdown had provided “key learnings” that would be rolled out more widely on operating safely amid the pandemic.
The company also stated that a £1bn ($1.24bn) rights issue in early June had “secured the business so it can withstand a period of low revenues.”
But it noted demand as still subdued in London, and added: “It is still very early days and therefore too early to draw any conclusions from our booking trajectory, especially as there has been volatility in hotel performance in other countries that relaxed controls before the UK.”
At the end of June, a number of holiday companies, including tour operator TUI (TUI.L) and the Eurotunnel, reported how bookings had ‘exploded ahead of COVID-19 travel restrictions being lifted.
“Today’s results read, ‘closed over lockdown’. So while the headline declines are scary, they were to be expected,” said Emilie Stevens, an equity analyst at Hargreaves Lansdown.
“With the foreign holiday market still rebooting it looks like UK staycations could be the main holiday choice this summer, which is good news for Whitbread’s regional locations.
“Unfortunately, while higher levels of domestic tourism is good news, particularly if it’s a trend that holds, it’s no substitute for international and businesses travellers visiting the UK’s major cities.”