Whitbread: Premier Inn owner braces for UK holiday boom

Premier Inn owner Whitbread has said it expects strong demand for holidays in the UK throughout the summer as Covid restrictions ease further from mid-May.

The hotel and restaurant firm forecasts "a significant bounce in leisure demand in our tourist locations".

At the same time, Whitbread laid bare the impact of the pandemic on its business as annual losses reached £1bn and sales tumbled by more than 70%.

The firm said last year was the "most challenging in our 279 year history".

It revealed that it had benefitted from £270m worth of government support during coronavirus, including the furlough scheme.

Whitbread, which also owns the Beefeater and Brewers Fayre restaurant chains, said almost all of its 800 UK and Ireland hotels, some 92%, were now open. This compares with just 39 that were opened during the first lockdown when they were used to provide accommodation for essential workers.

Recent lockdowns saw its hotels at just 23% of potential occupancy in January and 29% in February.

The company said: "Strong demand is expected for 'staycations' in UK tourist destinations throughout the summer, with business and event-led leisure demand starting to gradually recover thereafter."

It also plans to invest £350m this year, which will go partly toward refurbishments, but also to new advertising, which will again feature comedian and actor Sir Lenny Henry.

Despite this investment programme, it still intends to cut £100m in costs.

Last year, it warned it may have to lay off thousands of staff and approached landlords for a temporary rent cut. It also scrapped its dividend payout to shareholders, while directors and senior management took pay cuts.

It employs some 30,000 staff, 27,000 of which were furloughed under the Job Retention Scheme.

Whitbread's chief executive, Alison Brittain, said: "The vaccination programme in the UK means we can look forward to the planned relaxation of government restrictions as we move into summer, with the first major milestone being the return of leisure guests to our hotels, and the full reopening of restaurants from 17 May.

"We expect a significant bounce in leisure demand in our tourist locations during the summer, followed by a gradual recovery in business and event-driven leisure demand."

Julie Palmer from professional services firm, Begbies Traynor, said: "After having been able to report positive results and sell its profitable Costa arm to focus on hotels in previous years Whitbread, like so many others in this industry, has been rocked by the pandemic.

"It can get back on its feet again, but the Whitbread we saw before the pandemic could be different to the one we see after it. Even after all restrictions are removed change is coming."