Britain’s biggest hotel operator Whitbread reported a rise in full-year pre-tax profit as its Premier Inn hotel chain attracted holidaymakers by offering rooms for as little as £29 a night.
Whitbread, which also owns Costa Coffee and the Beefeater and Brewers Fayre pub restaurant chains, introduced new pricing initiatives to lure leisure customers to Premier Inn last year, making up for a shortfall in business travellers throughout the recession and enabling it to outperform competitors.
“It (the promotion) has been a really positive influence,” said chief executive Alan Parker. “We’ve seen a boost in occupancy at weekends and holiday periods as a result and a much bigger perception of Premier Inn as offering value for money.”
The company reported a seven per cent increase in underlying pre-tax profit for the year to £239.1m, ahead of the average forecast of £234m.
At Premier Inn, revenue per available room (RevPAR), a key industry measure, was down 6.4 per cent over the year, compared with a decline of 8.5 per cent in the wider budget hotel market and a 9.6 fall in the overall market. The company is expanding Premier Inn aggressively and opened 2,240 new rooms in 2009/10, giving it 42,799 rooms in 588 hotels.
Whitbread also saw strong growth from its Costa Coffee chain, where underlying operating profit grew by 60 per cent to £36.2m boosted by the opening of 312 new stores.
City A.M. Reporter