The ongoing popularity of staycations in the United Kingdom continues to boost the country's most prominent hotel brand.
Alison Brittain, CEO at Whitbread PLC, which owns Premier Inn, said the company is outperforming its competitive set. Further, sales revenue has exceeded Whitbread executives' expectations for the first three months of its current trading year.
Speaking on Whitbread's first quarter earnings results conference call, Brittain said hotel occupancy, revenue and bookings bode well for the remainder of 2022. Whitbread's portfolio of more than 820 hotels and 80,000 rooms are already 40% booked for the next quarter through the summer.
In year-over-year terms, Whitbread's first quarter accommodation revenue was 31% ahead of pre-pandemic numbers across its entire portfolio and 21.3% ahead of pre-pandemic numbers in the U.K., said Chief Financial Officer Hemant Patel.
For the next full-year trading cycle, Whitbread executives expect continued outperformance compared with pre-pandemic levels across the board, with revenue per available room predicted to be 22.7% above pre-pandemic figures in regional U.K. markets and 10.8% above pre-pandemic levels in London, according to the company's earnings release.
For its accommodations’ revenue, RevPAR is predicted to grow 14.6% in regional U.K. markets and 1.8% in London, for a combined 11.1% improvement in the metric across Whitbread's British portfolio.
“This impressive [first quarter] performance, together with improved visibility into [the second quarter], gives us increased confidence in delivering a strong first half and remaining ahead of the market for the rest of the year," Brittain said in the company's earnings release.
Whitbread's food and beverage offerings showed a 585.3% improvement year over year during the quarter, but remained 4.3% behind pre-pandemic numbers.
Brittain said the firm’s performance has been marked by a focus on commercial and operational considerations, continued popularity for the brand in its key markets, almost total direct distribution and a general contraction of U.K. supply.
In its second market of scale, Germany, Whitbread now has 40 assets, Brittain said, with a further 38 properties in the development pipeline.
One recent Premier Inn opening is the 393-room Premier Inn London Paddington, in Central London, the largest non-airport asset in its portfolio.
Brittain said staffing is the biggest challenge for Whitbread and Premier Inn. Increases in costs for energy and food and beverage all along the supply chain also are putting stress on the bottom line, she said.
Whitbread aims to invest between 20 million pounds sterling ($24.1 million) and 30 million pounds sterling on recruitment, renovations and IT within the next full year of trading, Brittain said. But she added that improved occupancy and average daily rate metrics mean this additional cost will not damage the firm’s improved margins.
Executives also announced they signed a new revolving credit facility of 775 million pounds sterling, which replaces a previous one of 850 million pounds sterling due to expire in September 2023.
Patel said the new five-year, multi-currency facility has two, one-year extension options.
As of press time, Whitbread’s stock was trading on the London Stock Exchange at 27.08 pounds sterling per share, down 9.6% year to date.