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By Pushkala Aripaka
(Reuters) -Premier Inn owner Whitbread continues to expect sales at its UK hotels to return to pre-pandemic levels during 2022 even though the spread of Omicron coronavirus variant has affected bookings recently, the company said on Wednesday.
The London-listed company, which also owns steakhouses Beefeater and Bar+Block, said overall sales rose 5% in its third quarter ending on Nov. 25, with revenue up 3.1% in the United Kingdom, Whitbread's biggest market.
The hospitality sector was among the worst-hit during the pandemic and supply chain issues along with tight labour markets have created further challenges even as bookings start to recover thanks to vaccination campaigns and looser restrictions.
Concerns about the Omicron variant then led to a spike in hotel booking cancellations https://www.reuters.com/business/cancellations-rise-ahead-holidays-due-omicron-trivago-says-2021-12-14 globally ahead of the holiday season, online hotel search firm Trivago said last month.
"UK accommodation sales remained resilient in December, albeit softening as we moved through the month and into the festive period as a result of the onset of Omicron," Whitbread Chief Executive Alison Brittain said in a statement.
Brittain told a briefing that occupancies were also lower after the Christmas period but said this was in line with a typically weak fourth quarter and having fewer guests helped it adapt quickly to staff shortages from workers falling sick.
The hotel operator also warned of challenges ahead in Germany from renewed pandemic-related curbs there and flagged more cost inflation in 2023, which it said it expected to be able to offset.
"It's difficult to determine at this point what the softening demand over Christmas will do to (Whitbread's) full-year sales," eToro analyst Mark Crouch said in a note.
Whitbread said the pub and restaurant sector remained more challenging with its food and beverage sales down 10% in the third quarter.
Its shares climbed as much as 2.2% early on Wednesday but had slipped back to trade 0.3% higher by 0945 GMT.
British Prime Minister Boris Johnson has bet on refraining from lockdowns to deal with Omicron, but Germany, a new and small market for Whitbread, has tightened https://www.reuters.com/world/europe/german-leaders-agree-new-restrictions-stem-omicron-variant-2022-01-07 several rules and many leaders there support a general vaccination mandate.
(Reporting by Pushkala Aripaka in Bengaluru; Editing by Shounak Dasgupta and David Clarke)