Premier Inn owner Whitbread returned to profit after being boosted by a strong recovery and “improving” business travel demand in the UK.
The parent company of the European budget hotel chain, which operates more than 800 properties in the UK and Germany, said it made a pre-tax profit of £58.2million for the year ending March 3, 2022, compared to a loss of £1 billion in the 2020-21 financial year.
During this period, the group’s revenue nearly tripled to £1.7bn in its 2021-22 financial year, from just £589m the previous year.
Alison Brittain, CEO of Whitbread, said: “While restrictions eased after the first quarter, high levels of leisure demand and improving business demand helped drive accommodation sales forward. in the UK compared to pre-Covid levels throughout the summer and fall, with sales remaining resilient throughout Q4 despite the emergence of the Omicron Covid variant.
The company added that trading in the seven weeks to April 21, 2022 “remains well ahead of the market”, with bookings up 327% compared to the same period last year and 30% in above pre-Covid levels.
Whitbread said it expected to benefit from an “acceleration in the exit of independent operators from the UK market”, which would give Premier Inn “a new opportunity” to take market share. Premier Inn already has 82,000 rooms in the UK.
The chain is expected to add between 1,500 and 2,000 rooms in the UK over the next 12 months, as well as opening an additional 2,500 rooms at properties in Germany.
“We have a particularly strong position in the UK market as the largest operator with the strongest brand, alongside our direct distribution, best-in-class operating model and large customer base,” added Brittain.
“This, combined with evidence of an accelerating supply contraction in the independent hospitality sector, presents Premier Inn with the opportunity to accelerate its market share gains, an opportunity we are capitalizing on. fully as we continually strengthen our customer offering.”
Brittain said the hotel market in Germany was “recovering at a slower pace than in the UK due to the higher level of government restrictions which lasted longer”.
“However, we have no reason to believe that the market will not come back strongly in due course,” she added. “With our open hotel portfolio, which now has 37 hotels [in Germany]all now under the Premier Inn brand, with 41 more hotels in the pipeline, the foundations for a successful business are already in place.
Premier Inn said earlier this year it would raise hotel rates to help offset the impact of rising inflation and it now expects hotel sector costs to rise by 8-9% this year, about 1% more than in its previous update. .