Profits for Whitbread have risen above pre-pandemic levels due to lower coronavirus regulations that have led to an increase in Premier Inn hotel bookings.
The hospitality company’s statutory profits for the six months ended September 1 were £233.9 million, compared to £172.2 million in the same time three years earlier and a loss of £37.8 million last year.
Sales in the UK Premier Inn subsidiary outperformed the broader mid-scale and budget hotel market, doubling to £1.3 billion as the industry profited from the absence of tight regulations and a massive resurgence of international travelers.
In addition to a comeback in leisure and business travel demand, growth was fueled by an increase in new venues and a 40 percent increase in average hotel rates.
This robust demand continued into the third quarter, with hotel revenue more than a third ahead of 2019 levels, despite food and beverage sales not yet recovering.
Whitbread expects that its restaurant sales would not approach pre-Covid levels during the current fiscal year, despite implementing several steps to attract consumers, such as expanding its beverages menu and renovating its gardens.
The trading update comes during a period of significant unpredictability in the hospitality industry, which is being severely impacted by rising energy costs and dwindling consumer incomes.
The FTSE 100 business, which also owns the Beefeater and Brewers Fayre restaurant franchises, warned that inflationary pressures and the seasonal decline in hotel demand would reduce margins shortly.
The business anticipates that higher labor, utility, and food and beverage costs, as well as expenditures in IT and marketing, will increase costs by £60 million this year.
In contrast to last year, when the majority of the world was still subject to onerous Covid-19 restrictions, the company was able to declare £49 million in dividend payments due to this year’s impressive performance.
The company anticipates opening an additional 1,500-2,000 rooms in the United Kingdom and 2,000-2,500 rooms in Germany by the beginning of March.
Allison Brittain, chief executive officer of Whitbread, stated, ‘Despite macroeconomic unpredictability, our present commercial performance is good, and our company has demonstrated its resilience throughout prior downturns.
With a solid balance sheet and tremendous growth potential in both the United Kingdom and Germany, we remain confident in our ability to create long-term value for all of our stakeholders for the whole year.
Brittain is scheduled to leave the company at the end of February to become the Premier League’s first female chairman, succeeding temporary chairman Peter McCormick.
Gary Hoffman’s brief time as McCormick’s predecessor was marred by the scandal surrounding Newcastle United’s sale to the Public Investment Fund, the sovereign wealth fund of Saudi Arabia.
Just before her appointment as the next head of the Premier League, Brittain faced a massive shareholder revolt over her yearly remuneration package of £2.16 million, which followed Whitbread’s loss of £15.8 million.
Additionally, Whitbread shares are approximately 31% below their value when she took charge. As of late Tuesday morning, they had risen 0.34 percent to £26.20.
