Whitbread posted a year-on-year 19 per cent increase in revenue for the first quarter of the 2024 financial year as it expressed confidence in its full year performance.
The Premier Inn owner said that for the 13 weeks to June 1, total UK accommodation sales for Premier Inn UK were up 18 per cent from the same period the year before, with UK like-for-like accommodation sales up 16 per cent due to strong demand from both business and leisure guests across the regions and London.
Revenue per available room (revpar) was 16% ahead of the year prior and 40% ahead of the same period in FY2020. UK food and beverage sales were 10 per cent ahead of the first quarter of FY23.
In Germany, Whitbread saw an increase in market demand, led by its cohort of 18 more established hotels, with revpar for this cohort increasing to €63 compared with €44 in Q1 FY23. Total revpar for the entire German estate increased to €55 compared to €35 in Q1 FY23.
Turning to its finances, the group said it has extended its existing £775 million revolving credit facility which remains undrawn, for a further 12 months to May 2028. The five-year facility is provided by a syndicate of seven banks led by Banco Santander, Barclays, NatWest and Bank of China.
Looking ahead, Whitbread noted forward-booked revenue in the UK is well ahead of last year. In Germany, it expects to reach break-even on a run-rate basis in 2024.
Whitbread will publish its interim results on October 18.
Why it matters
Whitbread's revenue jump underlines the key role that the hospitality sector, particularly hotels, plays in shaping the inflationary landscape in the economy. Strong demand from both business and leisure travellers is putting upward pressure on prices, further fuelling inflation. While higher revenue is good news for hotel operators, high inflation has prompted the Bank of England to steadily increase interest rates, a move that puts the brakes on consumer spending by eroding disposable income. If these trends continue, it could pose a challenge to the hospitality industry's recovery, even as it contributes to the very inflation that prompts interest rate hikes.
What they said
Dominic Paul, CEO of Whitbread said: “In the UK, our market leading brand and value-led customer proposition is continuing to deliver impressive revenue growth and a healthy RevPAR premium versus the wider M&E market. Our forward booked position into Q2 underpins our confidence in being able to deliver a strong first half result.
The continued recovery of the wider German market, the performance of our more established hotels and encouraging guest scores across all of our hotels mean we remain confident in achieving our long-term target of 10-14% returns on capital.”