Whitbread boosted by London Premier Inns

The country's biggest hotel and coffee shop operator Whitbread said it had performed in line with its expectations in the first quarter with a strong performance in London offsetting an adverse impact from the Easter and Royal Wedding holidays.

The group, which operates the Premier Inn budget hotel chain and Costa Coffee, said total sales grew by 9.2 per cent in the 13 weeks to 2 June with sales at outlets open more than a year rising by 1.7 per cent.

Whitbread, which opened its 600th Premier Inn in Stratford-upon-Avon earlier this year, said sales at Premier Inn hotels open more than a year were up three per cent during the period.

"Premier Inn is continuing to benefit from a stronger London market, whereas in the provinces our restaurants are being impacted in a more difficult casual dining market," chief executive Andy Harrison said on Tuesday.

Premier Inn has performed strongly amid tough economic conditions benefiting from business customers trading down from 4 and 5 star hotels and a £19 per room offer wooing leisure customers in off-peak periods.

Whitbread is planning to grow Premier Inn by 50 per cent to at least 65,000 rooms in the next five years and to double the size of Costa Coffee worldwide to 3,500 stores.

The group, which currently has over 1,200 Costa Coffee shops in the UK and more than 650 in 25 other countries, said sales at Costa Coffee shops open more than a year were up 4 percent.

Costa Coffee has also consistently grown sales through the downturn, being seen as an affordable luxury by many cash-strapped consumers.