Whitbread posts strong rise in Premier Inn sales; Holds guidance

11th Jan 2024 07:22

(Sharecast News) - Pubs and Premier Inn owner Whitbread maintained full-year guidance after a strong rise in accommodation sales during the third quarter, with momentum continuing into the final three months of the financial year.

The company said accommodation revenues rose 13% year on year, driven by a 47% jump in German sales. Food & beverage operations were up 7%.

Strong trading continued into the fourth quarter with UK accommodation sales 12% ahead of fiscal 2023 with revenue per available room (RevPAR) - - a key industry metric - up 10% versus and 39% ahead of pre-Covid pandemic 2020.

Third-quarter RevPAR increased by 9% in the UK with high occupancy and strong pricing. However, occupancy, room rates and RevPAR all fell compared with the second quarter. Total accommodation revenue fell to £535m from £591m and RevPAR to £70 from £77.45.

Whitbread said it expected net UK cost inflation between 3% and 4% on its £1.7bn - £1.8bn cost base, including operational efficiencies of between £40m and £50m

"With a positive forward booked position in the UK, a favourable supply environment, a clear commercial plan and cost efficiencies, we remain confident in the FY25 outlook," it added.

"In Germany, we remain on-track to break-even on a run-rate basis during calendar year 2024."

"In the UK, we continued to see robust demand for our hotels driving high levels of occupancy and strong pricing. Our focus on delivering a high quality proposition at a great price meant that Premier Inn UK has continued to outperform the M&E market."

Derren Nathan, head of equity research at Hargreaves Lansdown, said there were "a few signs that Whitbread is having to work a little harder to keep its room full".

Quarter on quarter occupancy fell ... and whilst London room rates only nudged down a fraction, compared to the second quarter, they dropped by 11% in the UK regions," he said.

Reporting by Frank Prenesti for Sharecast.com