Skift Take
Premier Inn hotels are like shoeboxes, but their beds have comfy mattresses that come with a “good sleep” guarantee. The profitable brand anticipates strong growth in the UK and Germany.
Premier Inn’s parent company, Whitbread, announced on Tuesday an “accelerating growth plan” for the budget hotel group, which owns about 800 hotels in Britain and dozens more in Germany.
Parent group Whitbread plans to convert 112 underperforming restaurants that it owns into new Premier Inn hotels, adding 3,500 rooms to the Premier Inn network.
Today, Premier Inn has about 77,000 hotel rooms in the UK. The group aims to increase that by 25% by mid-2029. It doesn’t plan to stop there.
“We see a significant opportunity for further growth towards our long-term rooms potential of 125,000 rooms,” said CEO Dominic Paul on an earnings call.
UK hotel performance
Premier Inn reported results for its fiscal year through February 29, 2024.
- The hotel group reported a 36% jump in pre-tax profit to about $700 million (£561 million).
- Premier Inn’s revenue per available room was 10% higher than a year earlier. Executives credited their strong direct booking business and their software that matches rates to demand.
- The U.K. part of the hotel business, which controls most of its own properties, achieved its highest-ever level of return on capital, 15.5%.
- In Germany, Whitbread added over 1,400 rooms and reduced losses. The overall market is 40% larger in Germany than the UK and executives see a big long-term opportunity.
- The company plans to cut nearly $200 million (£150 million) in costs over the next few years.
Accommodations Sector Stock Index Performance Year-to-Date
What am I looking at? The performance of hotels and short-term rental sector stocks within the ST200. The index includes companies publicly traded across global markets, including international and regional hotel brands, hotel REITs, hotel management companies, alternative accommodations, and timeshares.
The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more hotels and short-term rental financial sector performance.
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