Premier Inn to raise room rates to combat 8% inflation

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Remire Inn owner Whitbread will raise room rates to combat sector inflation of up to 8% as the hospitality industry faces staff shortages and supply chain disruptions amid the fallout from the pandemic.

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Nearly £1.4 billion of the FTSE 100 Group’s cost base – from wages and electricity bills to food – is vulnerable to price hikes, but the firm has largely offset those costs through higher prices, efficiency savings and asset growth. expected to do.

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About 10% of its 30,000 employees are currently off work in the latest sign of a staffing crisis caused by the pandemic.

The company, which also owns the Brewers Fair and Beefeater chains, saw a 4.4% decline in overall UK sales in the six weeks to 6 January compared to the same period in pre-pandemic 2020, with food and beverage revenue down 17.2% I. ,

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Strict lockdown measures in Germany also took a toll, with occupancy levels falling 36% in its network of 32 hotels there.

Whitbread said it was too early to assess the impact of the Omicron version on business throughout the year, with January and February already typically the quietest months.

It also revealed that it has delayed spending £20 million on room refurbishment and marketing amid uncertainty.

But the group expects Premier Inn Hotel trading to recover to pre-Covid levels soon: an optimism that piqued investors and saw its share price stabilize despite a gloomy outlook.

CEO Alison Brittain said: “UK housing sales remained flexible in December, although we remained soft through the month as a result of the launch of Omicron.

“While our hotel performance was excellent, the value pub and restaurant sector in which we operate is more challenging.”

It said UK housing sales rose 5.5% in the November 25 quarter, while food and drink sales declined 11.1%.

Mamta Valecha, Equity Research Analyst at Quilter Cheviot, said: “Cost inflation is expected to run at 7-8%, although Whitbread expects to be largely offset by this.

“For investors, Whitbread can be seen as a recovery play and we are confident that Premier will emerge stronger from these crises.”

Shares held steady from 28p to 3227p.


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