Premier Inn owner Whitbread’s shares soar as business travel demand returns
Shares in Premier Inn owner Whitbread shot up this morning after it said hotel bookings had accelerated in the run-up to summer.
Whitbread’s shares rose by four per cent as markets opened, while airlines also advanced after Britain said it may allow double-jabbed travellers to enjoy a foreign holiday this year.
The gains came even as Whitbread saw its quarterly sales take another hit as lockdown restrictions halted operations.
During the 13 weeks to 27 May, UK accommodation sales were down 60.9 per cent compared to the same period in 2020, while food and drink sales plunged by 86 per cent.
Encouraging trends
There were encouraging trends after 17 May, however, when overnight leisure stays were permitted.
Whitbread said that 98 per cent of its hotels and restaurants were now open, as well as a gradual increase in business demand.
It also said that forward booking trends in tourist locations over the summer were strong, except for central London and airport locations.
“The travel industry has been on a government-operated rollercoaster ride since the onset of the pandemic, but it seems Whitbread is finally stepping off to reach more stable ground,” said Laura Hoy, equity analyst at Hargreaves Lansdown.
“The government’s cautious approach to fully exiting lockdowns will take a bite out of the summer for the hospitality sector though, and Whitbread is not immune.”
Ten new hotels opened
The company, who opened 10 new hotels in the UK during the quarter, has kept its outlook unchanged.
“The group traded significantly ahead of the market during the quarter, despite the impact of the government restrictions that were in place,” said Alison Brittain, CEO of Whitbread.
“Additionally, our forward bookings continue to improve, benefiting from the anticipated post-lockdown bounce in leisure demand, and a continued gradual improvement in business bookings.”
Julie Palmer, partner at Begbies Traynor, believes this summer is a big opportunity for the company to “claw back lost revenue”.
“Undoubtedly the announcement of a delay to removing of restrictions will have taken the wind from its sails but it will feel that while it can lobby, it cannot wallow,” Palmer said.
“This summer is still a huge opportunity to claw back lost revenue for Whitbread and it’s a challenge that it cannot afford to fail.”