Whitbread, owner of hotel brand Premier Inn, blamed “soft demand”, especially in the final quarter of its financial year, for lacklustre accommodation sales in 2018/19.
Reporting its preliminary financial results for the year to 28th February, Whitbread revealed a 2.1% increase in revenue for its continuing operations to £2.05bn, while underlying profit before tax rose 1.2% to £438m.
Whitbread sold its coffee brand Costa to the Coca-Cola Company for £3.9bn in January this year, which meant that its statutory results saw a 39.1% dip in pre-tax profit for the year to £269m, although it indicated that it would return up to £2.5bn in proceeds from the sale to shareholders.
When it came to its continuing operations, like-for-like accommodation sales at its hotels fell by 0.6% during the year, which the firm blamed on falling business and leisure confidence, leading to weaker demand.
Commenting on the fall, chief executive, Alison Brittain, said: “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. However, it's important to note that our strong balance sheet, ongoing efficiency programme and integrated operating model means we are likely to be more resilient in a weaker market than many of our competitors.”
Total accommodation sales growth within the Premier Inn UK brand were up by 3.5% as a result of new openings. The UK network of hotels now stands at 76,000 rooms, with another 13,000 rooms in the pipeline. Whitbread said it also saw further opportunities for growth with its hub and ZIP brands.
Meanwhile, the company recently opened its second hotel in Germany, in Hamburg, and how has a pipeline of almost 7,000 rooms in the country.