By Jane Denton For Thisismoney
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Whitbread sales were lifted by strong demand for UK accommodation, as people travelled for the first Christmas without Covid-19 restrictions.
The hotel chain operator, which owns Premier Inn, reported a 22.9 per cent jump in total sales for the 13 weeks ending 1 December, when compared to the same period a year ago.
It also benefited from price hikes, with the group’s average UK room rate standing at £74.02, and £98.62 in London, in the year to date.
‘The strength of our forward booked position, robust pricing, estate growth and efficiency programme all underpin our confidence in the outlook for full year of 2024,’ Whitbread boss Alison Brittain said.
The Premier Inn owner has hiked prices this year
The company, which also owns the Beefeater and Bar+Block brands, maintained its cost outlook for fiscal 2023, but forecast net cost inflation on its £1.6billion UK cost base to be up between 7 and 8 per cent next year.
It also hedged labour, food and beverages, as well as utilities costs by 75 per cent for the next fiscal year.
Whitbread shares rose today and were up 5.11 per cent or 146.00p to 3,001.00p this afternoon, having slipped by about 5 per cent in the past year.
In the UK and Germany, the group’s sales increased by 19.2 per cent and 158 per cent respectively.
UK accommodation revenues jumped by 23.8 per cent, driven by a combination of increased occupancy, higher average room rates and estate growth, with a strong performance across both London and the regions. Food and drink sales rose by 8.4 per cent.
In Germany, accommodation sales rose by 172.8 per cent, while food and beverage sales were 91.1 per cent higher than by the same point a year ago. The group has 45 hotels in Germany with a further 36 in the pipeline.
Ms Brittain, said: ‘Premier Inn UK delivered another excellent quarter with a strong performance, both in absolute terms and also relative to the broader midscale and economy sector.
‘These revenue trends have continued into the fourth quarter, with good occupancy and high average room rates sustaining strong RevPAR growth and UK food and beverage sales remain well ahead of last year.’
Brittain said Premier Inn Germany had another ‘robust’ quarter, led by the company’s cohort of more established hotels that are performing particularly well.
She added: ‘Despite a more challenging period for the UK economy, our winning business model continues to deliver outstanding value and quality for our guests.’
Michael Hewson, chief market analyst at CMC Markets UK, said: ‘Premier Inn owner Whitbread shares have got off to a good start to the day after reporting a strong Q3 performance, helped by a healthy rebound in its Germany business which appears to be performing well, as more hotels open there, even though the business is still performing at a loss.’
Keith Bowman, an investment analyst at Interactive Investor, added: ‘In all, the uncertain economic outlook including a cost-of-living crisis still overhangs.
‘Elevated costs such as those for wages and energy remain also obvious headwinds, while UK food and beverage sales have yet to recover to their pre-pandemic levels.
‘More favourably, a recovery from the pandemic is at least underway. Initiatives to help return food and drink sales to pre-pandemic levels are being taken, while supply dynamics are expected to help keep pricing strong.
‘On balance and given Whitbread’s budget hotel focus in tough economic times plus potential for further expansion in Germany, consensus analyst opinion currently points to a buy.’
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