Premier Inn owner Whitbread has revealed plans to invest £350 million into its hotels and a new advertising campaign fronted by comedian and actor Sir Lenny Henry despite sinking to a record loss of over £1 billion during the pandemic.
In a stark demonstration of the havoc Covid has wrought on the hotels sector, the FTSE 100 firm said on Tuesday that its annual revenues fell by 71.4% to £589.4 million in the year to February 25, down from £2.1 billion a year earlier, while a pre-tax profit of £280 million flipped to a £1.01 billion statutory pre-tax loss.
Occupancy levels were just 23% in January and 29% in February.
The company said the record loss was in part a result of a £348 million impairment charge on its portfolio in Germany.
But 92% of Whitbread's hotels are now open and the company said it is expecting "strong demand" for so-called "staycations" throughout summer - and business travel and event-led demand "to gradually recover" later this year. Whitbread plans to reopen its entire UK estate on May 17.
The company said it is targeting a further £100 million in cost savings by 2024, but plans to invest £350 million into refurbishments, opening around 5,000 new rooms, and into the new advertising spree - its first in three years - in a bid to boost recovery.
Chief executive Alison Brittain said the last financial year "was one of the most challenging in our 279 year history".
But she highlighted the firm's strong market position and said bosses "expect a significant bounce in leisure demand in our tourist locations during the summer, followed by a gradual recovery in business and event-driven leisure demand".
Brittain said: "We continue to take actions to ensure that we exit the crisis as a leaner, stronger and more resilient business."
Shares were down 2.5%, or 87p, to 3324p, in early trading.