Premier Inn bosses upbeat as hotels planned for Edinburgh
In Germany, Premier Inn accommodation sales growth slowed from 23% in the first seven weeks to 15% for the first quarter.
Meanwhile Whitbread, which operates restaurants trading under brands such as Beefeater, Brewers Fayre and Table Table, said food and beverage sales tumbled by 16%, in part because it offloaded some underperforming restaurants and converted some into more hotel rooms.
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Russ Mould, investment director at stockbroker AJ Bell, said: 'How much does it matter if you're doing better than the wider market and still struggling? That's the question in front of the market as Whitbread updates on its first-quarter trading.
'The Premier Inn owner has a proposition which is relatively affordable and reliable – anyone booking a room knows what they are going to get and that is a key selling point.
'However, the key revenue per available room metric is still trending negative for its domestic business thanks to the weak backdrop for the UK hotels market as a whole amid an uncertain economic backdrop.
'With visibility limited, all the company can do is control what it can and hope that it comes out of this difficult period with its competitive position enhanced thanks to weaker players and independent operators falling by the wayside.'
Whitbread chief executive Dominic Paul gave an upbeat assessment of the company's performance, declaring it was 'making excellent progress' with its accelerating growth plan, which involves converting 112 branded restaurants into new hotel rooms and selling 126 more.
The plans announced in April 2024 will also see around 1,500 jobs axed as it looks to save about £150 million over the next three years.
Mr Paul highlighted progress with plans to expand Whitbread's hotel network in the UK and Germany, which currently numbers more than 900 properties. And he said Whitbread was 'on course to deliver £60m of cost efficiencies and meet our target of £250m-£300m of property disposal proceeds this year'.
He added: 'Our five-year plan is on track and will deliver a step change in profits, margins and returns over the next few years.
'In the UK, we continue to outperform against a challenging market backdrop, with the strength of our brand and commercial programme continuing to drive total accommodation sales and RevPAR growth ahead of the market. Whilst the short-lead nature of our business means that our forward visibility remains limited, our forward booked position is ahead of last year and we remain confident that we can continue to outperform the market.
'In Germany, we delivered another strong trading performance, led by the increasing maturity of our estate and our commercial initiatives. Our total estate is outperforming the M&E (midscale and economy) market, and we remain on course to deliver profitability in FY26.'
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