Premier Inn Owner Whitbread Says Its Business Has Slowed
Premier Inn owner Whitbread said on Tuesday October 27 that business has slowed this month, adding to pressures after the firm posted a hefty first-half loss.
Hopes of a sustained recovery in the hospitality industry following the easing of coronavirus restrictions in July have faded since the UK government reimposed curbs last month to tackle a new wave of infections.
In response, Whitbread plans to cut up to 6,000 jobs at its hotels and restaurants, it said last month.
Premier Inn UK's occupancy level increased to 58% in September from 51% in August, but has dropped back down to approximately 50% so far in October, CEO Alison Brittain said on a call with the media.
Tighter restrictions to try to curb the spread of the cornavirus could lead to a further decline in November and December, she added.
The company has introduced flexible options allowing customers to cancel or amend bookings without extra costs.
Whitbread said that while it has been performing ahead of the market, it is seeing signs of COVID-19-induced distress in a competitive sector for independent and budget hotel operators.
It signed a deal for up to 15 hotels in Germany, with the total investment expected to be up to €50 million euros, as it further expands there.
Expecting Subdued Demand At Its Restaurants
The owner of the Beefeater, Brewers Fayre and Bar + Block chains also said that it expects subdued demand at its restaurants, hurt by the new curbs, low consumer confidence and the end of the UK government's "eat out to help out" discount scheme.
Whitbread's pre-tax loss, including an impairment charge, was £724.7 million in the first half of its financial year, compared with a pre-tax profit of £219.9 million a year ago.