Yahoo Finance Premier Inn owner blames economic uncertainty for fall in room sales
Premier Inn-owner Whitbread (WTB.L) on Thursday pointed to continued economic and political uncertainty in the UK as it blamed weak business and leisure confidence for a decline in its accommodation business.
In a trading update, the FTSE 100 hotel operator said that UK accommodation sales fell by 0.4% in the three months to 28 November.
Like-for-like sales, which excludes the 1,000-plus hotel rooms it has added in the past year, fell by 2.1%.
While the company said that it still expected full-year results to be in line with expectations, it pointed to economic uncertainty and said that weak business and leisure confidence outside London continued in its third quarter.
Its UK room occupancy rate fell by 1.8 percentage points, while its average room rate in the UK fell by 2.3%, to £62.18 ($81).
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Revenue per available room fell 4.4% to £50.23.
Overall, Whitbread’s UK business grew by 0.3% in the period, thanks to 1.9% growth in its food and beverage business, which includes the Brewers Fayre and Beefeater pub brands.
The company said it had seen “more positive” data outside of London in the start of its fourth quarter, and continued strength in the London market.
“However, it is still early in the fourth quarter and a level of caution remains on the UK hotel environment,” Whitbread said on Thursday.
The hotel operator said that, in spite of the short-term economic uncertainty, there remained “significant long-term opportunities.”
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“We can access these due to our strong financial position, resilient model and ongoing investment to improve our market-leading proposition,” it said.
Whitbread also gave an update on its German expansion plans, noting that its pipeline in the country now included almost 50 hotels.
The group has already opened three hotels in Frankfurt, Hamburg, and Munich, and said that its growth “remains firmly on target.”
Whitbread expects to add 5,000 new rooms in 2020, consisting of around 3,000 new rooms in the UK and 2,000 new rooms in Germany.
