Weak regional business market hits Premier Inn sales

Premier Inn's UK accommodation sales fell 1.5% in the first quarter of the year due to a weaker regional business market.

In parent company Whitbread's trading update for the first quarter of its 2020 financial year, the group said leisure and particularly business confidence are still weak, and with ongoing political and economic uncertainty in the UK, regional hotel demand has taken a hit. As a result, Premier Inn's F&B performance also declined slightly (0.4%).

Although the group said forward bookings look "positive", "caution remains" on the UK hotel environment, given ongoing political uncertainty and the impact this has on business confidence.

Alison Brittain, Whitbread chief executive, said: "We have delivered a resilient performance in the first quarter despite more challenging market conditions and we continue to make good progress with our efficiency programme, which is helping to partially offset another year of high industry cost inflation.

"While we are cautious about short-term market conditions, we are confident in our plans, given the significant growth opportunities in the UK and internationally. Given our strong balance sheet, efficiency programme and robust business model, we are in a strong position and we will continue to invest in order to maintain Premier Inn's competitive advantages and to capitalise on our structural growth opportunities."

In London, room additions of 9.4% over the last year contributed to Premier Inn's total accommodation sales growth of 1%. However, like-for-like accommodation sales declined 4.2%, reflecting weaker market conditions. Whitbread said London "continues to be a good long-term market with strong demand and high occupancy levels", and further capacity will be added.

During the quarter 282 new rooms were added in the UK, with 3,000 to 3,500 rooms expected to be added during the financial year.

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