Whitbread sales beat expectations as the UK’s largest budget hotel operator pulled business from the squeezed independent sector, while sales in its home market were particularly buoyant.
Comparable accommodation sales in the UK were up 21.3% in the three months to June 2 compared to the same period in 2019, before the pandemic hit, the Premier Inn owner said. Compared to last year’s confinement period, they have more than tripled.
Shares of Whitbread rose nearly 4% at the start of trading in London on Wednesday, narrowing the decline for the year to 11%.
Premier Inn’s recovery “continues to be ahead of expectations”, chief executive Alison Brittain said on Wednesday, with the hotel chain “significantly” outperforming the market.
Brittain attributed part of the improved performance to the “accelerating contraction of independent supply”.
Total accommodation sales were 27.2% higher than industry rivals, while UK food and drink sales approached pre-coronavirus levels, the statement said.
“This impressive performance in the first quarter, coupled with improved visibility into the second quarter, gives us added confidence to deliver a strong first half and stay ahead of the market for the rest of the year,” Brittain said.
Shore Capital analyst Greg Johnson said Premier Inn had been buoyed by particularly strong demand in London.
A consumer-driven recession looming this year could hamper the improving sales trend, however, he warned.
Also Germany, where Whitbread has expanded, has exceeded expectations in the past two months as the country emerges from lockdown restrictions.
“We are optimistic about the improving outlook for the full year in Germany,” the statement added. “There is no change in our view of the medium to long-term value creation opportunity for Premier Inn in Germany.”