By Chandini Monnappa and Yamini Kalia
(Reuters) -Premier Inn owner Whitbread on Thursday signalled strong demand for the upcoming summer season and said it was confident about its medium-term goals, supported by planned expansions in the UK and continued strong performance in Germany.
Its shares rose as much as 8% to their highest since February 11.
Hotel operators are navigating waning leisure demand as high inflation curbs consumer spending on vacations. To cope, it initiated an “Accelerating Growth Plan” to enhance offerings, expand operations, and achieve cost savings.
In the UK, the company has removed some low-performing restaurants, added rooms, and cut jobs, while strong demand in Germany has partially offset UK weaknesses.
Premier Inn, the company’s budget-hotel chain, was seeing good levels of demand into the peak summer months, and CEO Dominic Paul said he was optimistic that a pipeline of events in the UK like the upcoming Oasis concert would help business.
For the seven week period to April 17, the firm said total accommodation sales at its UK segment were down 1% but in Germany, sales rose 23%.
“It’s tough out there for hoteliers but the UK’s largest hotel brand is continuing to outperform the competition,” Derren Nathan, head of equity research at Hargreaves Lansdown, said.
Premier Inn, which competes with Travelodge, Ibis hotels, and other budget and non-budget hotels, opened 1,075 new rooms in fiscal 2025 and announced a 250-million-pound ($333 million share buyback.
Whitbread said it was confident of achieving at least 300 million pounds in incremental adjusted profit before tax by 2030, which would allow for over 2 billion pounds in share buy-backs and dividends.
CEO Paul also said that if European travellers ended up picking the United Kingdom over the United States as their destination, it would be positive for its business.
Global economic instability triggered by U.S. President Donald Trump’s tariff threats is leading to worsening European recession fears, with many worrying that consumer and travel spending could suffer as a result.
($1 = 0.7511 pounds)
(Reporting by Yamini Kalia and Chandini Monnappa in Bengaluru; Editing by Sumana Nandy and Emelia Sithole-Matarise)
