Premier Inn owner Whitbread warns of slump in hotel demand
Premier Inn owner Whitbread has posted a near-40% plunge in annual profits and warned of a slowdown in holidaymaker demand for hotel rooms amid Brexit uncertainty.
The hotel group said UK like-for-like accommodation sales fell 0.6% in the year to February 28 as it was affected by a decline in demand, particularly in the final three months.
It added there had been a further weakening in demand since the start of its new financial year, particularly in the regions, where it has a large presence.
In its first set of full-year figures since last year’s sale of Costa Coffee to Coca-Cola, Whitbread said pre-tax profits tumbled 39% to £260 million with the boost from the deal stripped out.
With the effects of the deal included, statutory pre-tax profits jumped to £3.7 billion, up from £436 million in the previous year.
Underlying pre-tax profits on continuing operations rose 1.2% to £438 million, on the back of recent cost-cutting.
Shares fell 3% after the results.
Whitbread chief executive Alison Brittain said: “In the fourth quarter, we saw a decline in business and leisure confidence, leading to weaker domestic hotel demand.
“This weakness has increased into March and April particularly in the regional business market, coinciding with an acute period of political and economic uncertainty in the UK.
“At this stage in the new financial year it is too early to know how business confidence and its impact on the market will evolve.”
Overall accommodation sales grew 3.5% over the year, reflecting the construction and expansion of hotels during the fiscal year.
During the year Premier Inn opened 23 hotels in the UK and expanded its estate by 5% to more than 76,000 rooms.
It has committed to a pipeline of expansion which will see this grow to 89,000 rooms, as well as creating a further 7,000 rooms in Germany as it looks to grow across Europe.