Belfast Telegraph

Budget hotels' success helps to drive profits at UK leisure group

Leisure group Whitbread, which has recently opened a new Premier Inn in the Titanic Quarter, said it was set for strong annual profit growth following a stellar year for budget hotel brand Premier Inn.

The hotel chain - advertised by comic Lenny Henry - saw sales grow 9.6% on a like-for-like basis in the 39 weeks to December 2, while occupancy rates for the current financial year are expected to be 77%, up from 70% last year.

Whitbread, which also owns coffee chain Costa and restaurants including Brewers Fayre, is rolling out aggressive expansion plans across the group and said it remained on target to have 55,000 Premier Inn rooms in the UK by the end of 2013/2014.

Chief executive Andy Harrison said: "The positive momentum gives us confidence that, despite an uncertain outlook for consumer spending, the outturn for the full year will be strong profit growth."

Premier Inn, which generates around a third of Whitbread's profits, saw revenues per available room - a key measure in the hotel industry - increase 9.2% on a like-for-like basis in the year to date to £43.70. The chain has hotels across the UK and Ireland and opened 26 new sites in the year to date.

Costa saw same-store sales surge, up 11% in the third quarter, and is on track to have at least 3,000 stores worldwide by 2014/2015. More than 300 new outlets will have opened by the end of the financial year, bringing the total to around 1,200 in the UK and 650 internationally.

Whitbread's restaurants reported a slowdown in like-for-like sales growth to 1.5%, with the heavy snowfall at the end of the period offsetting the impact of value meal deals on demand.