More rooms at the Premier Inn drive up Whitbread revenues

June 16, 2015 Leave your thoughts

Comedian Lenny Henry’s star turn in Whitbread’s TV advertising campaign for Premier Inn contines to fill hotel rooms.

Sales at the national hotel chain are up 14.3pc for the 13 weeks to May 28, driving up total revenues at the leisure giant, which also owns the Costa coffee chain, by 12.5pc.

Whitbread has secured growth by increasing the number of rooms available at Premier Inn by 333 over the past three months, while keeping occupancy rates at around 80pc, only 0.1pc down on the previous quarter.

Revenue per room is also up more than 6pc, which is an indicator that Premier Inn is no longer competing purely on price with rivals such as Travelodge.

Costa too performed well in the first quarter, growing sales by 15.9pc to £375.2m, and increasing sales at Costa franchises by £13.5pc to £143.6m.

The coffee chain continues to increase market share in the UK as US rival Starbucks loses ground following the row over its corporation tax payments.

In its latest trading update, Whitbread claimed that the company has started the new financial year “well, in line with expectations”.

“Costa had an excellent quarter,” said chief executive Andy Harrison. “We are on track to deliver ambitious growth milestones.

“This year we plan to open around 5,500 new Premier Inn UK rooms and around 250 Costa stores worldwide.

“Our committed UK pipeline has grown to 13,339 rooms and construction is underway on 42 new hotel sites as well as 19 hotel extentions.”

The company’s restaurants fared less well, with sales at Whitbread’s Beefeater grill, Brewers Fayre, Taybarns and Table Table brands depressed by a long, cold winter.

Like-for-like sales growth across the group rose 4.3pc, missing analysts’ expectations for a more bullish 5pc increase year-on-year. Shares were down 0.69pc this morning to £50.05.

In May this year, Whitbread named Alison Brittain, currently head of Lloyds Banking Group’s retail division, as its new chief executive.

Ms Brittain, 50, will replace Andy Harrison, who said in April he would retire from full time executive life at the end of February next year.

The company announced today that instead of starting her new role in January 2016, she would be joining Whitbread as chief executive “designate” on September 28, and take over from Mr Harrison on December 7 as full-time boss of the firm.

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