Premier Inn owner says rise in independent hotel closures has boosted its sales

The owner of Premier Inn has cheered a boost in sales as the chain said it was benefiting from a wave of independent hotels shutting down across the UK since the pandemic.

Whitbread said there are fewer hotel rooms on the market to meet strong levels of demand.

The company, which also owns food brands including Beefeater and Bar + Block, reported a 14% jump in accommodation sales and a 10% rise in food and beverage sales in the UK in the first six months of the financial year, compared with last year.

Revenue per available room for Premier Inn UK – an important measure for hotels of sales performance and how many rooms are being filled – was £71.02, up from £62.39 per room last year.

The group, which has more than 800 Premier Inn hotels in the UK, said it had improved its pricing strategy to reduce the proportion of rooms sold at £80 or less.

The stronger performance saw its pre-tax profit grow by 29% to £395 million over the half-year.

Hotel bookings were particularly strong in London, which jumped by nearly a quarter year-on-year, due to demand for leisure and business travel, and tourists visiting the city.

There has been a sharp reduction in independent hotels in the UK since the Covid-19 pandemic, with many seeing buildings converted into something else since closing, Whitbread said.

This has led to fewer hotel rooms on the market which has helped fuel demand for the chain.

It comes as the number of firms falling into insolvency has jumped this year, according to Government figures, as high inflation, higher interest rates, and a lack of consumer confidence has weighed heavily on businesses.

Whitbread said shrinking supply has helped create the opportunity to grow its pipeline of hotel rooms from 110,000 to 125,000 in the UK and Ireland. It currently has around 91,000 rooms open.

Meanwhile, the group has been rapidly expanding across Germany with the aim of becoming the biggest hotel chain there.

Dominic Paul, Whitbread’s chief executive, said: “This is an impressive first-half performance. In the UK, we maintained high levels of occupancy while continuing to attract excellent guest scores and offering great value for our customers.

“Given the structural shift in hotel supply and by continuing to invest in our assets, our brand and our teams, we remain confident that we can both extend our market-leading position in the UK and replicate that success in Germany.”