Resilient performance among its German hotel portfolio boosted Whitbread PLC's Premier Inn hotels in United Kingdom, where rooms revenue was flat in the first quarter.
But Whitbread executives said Premier Inn — the largest hotel brand in the U.K. by portfolio size — continues to outperform its competitive set in the economy and budget hotel sector.
For the full year to May 30, Whitbread's group total sales grew 1% year over year to £739 million ($937.5 million).
Its numbers were strengthened by performance in Germany, which Whitbread CEO Dominic Paul said is a market that is nearing maturity. Total accommodation sales rose 15% for Premier Inn Germany year over year.
“Our cohort of more established [German] hotels is continuing to outperform the … market and we remain on course to achieve the important milestone of reaching break-even on a run-rate basis during the second half of 2024,” Paul said during an earnings conference call Tuesday.
“Our total estate revenue per available room increased to €57 ($61), and our cohort of more established hotels continued to perform ahead of the wider market, achieving a RevPAR of €61,” Paul added.
In the first seven weeks of the quarter — which Whitbread tracks from March 1 to May 30 — the company's trading performance was down 1% year over year, but strengthened as the quarter rolled on, Paul said. Midweek business demand and peak leisure demand "remained robust" while weekend hotel demand was a bit softer, according to the company's earnings release.
But Paul said there are still reasons for optimism in the U.K. Premier Inn is still on course to add a further 3,500 rooms to its U.K. portfolio, and overall there's a little growth of hotel brand supply coupled with high demand in the short term.
Inflation in the U.K. is falling, but Paul also noted the possible effects to business from the upcoming July 4 general election in the U.K.
Whitbread also announced it has a new target of 5,000 hotel rooms in Ireland, a 30% increase on its current rooms total.
Whitbread continues with its share buyback scheme. The firm has purchased approximately 3.2 million shares with a value of £95.7 million out of a total planned buyback of £150 million. Paul said the repurchased shares would be canceled.
As of press time, Whitbread's stock was trading on the London Stock Exchange at £29.99 per share, down 17.9% year to date. The London Stock Exchange’s FTSE 100 index was up 5.9% over the same period.