Drop-off in business travel hits profits at Premier Inn operator Whitbread
Regional room sales suffer despite weaker pound pulling more foreign tourists into London
A fall in business travel is being blamed as adjusted pre-tax profits at hospitality company Whitbread fell 4.1 per cent to £236 million ($305m, €274m) in the six months to August 29.
Whitbread has its origins in brewing, but is now a major hotel and restaurant company best known for its budget Premier Inn chain of 810 hotels, the UK’s largest hotel brand. with adjusted revenues dipping slightly to £1.08 billion ($1.39 bn, €1.25 bn).
“Shorter-term trading conditions in the UK regional market have been difficult, particularly in the business segment where we have a higher proportion of our revenue,” Whitbread CEO Alison Brittain said.
The biggest profit hit came in regional markets outside London, where 80 per cent of Premier Inns are located. However the company said accommodation sales in London rose as the weaker pound attracted more foreign tourists.
Reuters reports that a 3.6 per cent decline in first-half total UK like-for-like accommodation sales would previously have been cushioned by alternative revenue streams, but since the sale of the Costa Coffee chain to Coca-Cola this year, Whitbread has been left without such an alternative.
Whitbread profits also took a hit from increased new hotel openings in Germany, a fast-growing market which the company says is a third bigger than the UK market. Whitbread expects to spend £300 million-£350m ($388-$453 m, €348-€406 m) opening new rooms in Germany this fiscal year.