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Whitbread ramps up expansion of Premier Inn

By Becky Paskin , 28-Apr-2011

Whitbread has ramped up its expansion plans for budget hotel chain Premier Inn and adjoined restaurants following strong end of year trading results.

Whitbread has ramped up its expansion plans for budget hotel chain Premier Inn and adjoined restaurants following strong end of year trading results.

The group plans to improve on its previous goal of opening 12,000 new rooms within the next five years by a further 10,000 rooms, taking its total estate to 65,000 rooms by 2016.

It plans to achieve 40 per cent of this amended target by concentrating on new catchment areas where Premier Inn is not currently present. In addition, the group also plans to grow its estate via the joint site model and as such expects to open 80-100 new restaurants over the next five years.

Mark Anderson, commercial & property director for Whitbread, said: “My property team has now turned the burners up to full to ensure that we can secure great sites in great locations to deliver this increased number of bedrooms within the next five years.

“We’ve raised our sights and want to send a clear signal to the market that we are in the business of growth and keen to do deals with partners who can help us to achieve our plans, reinforcing our position as the UK’s biggest budget hotel operator.”

Premier Inn achieved a like for like occupancy rise of 6.6 per cent to 76.2 per cent, leading to a revPAR increase of 8.2 per cent.

Group results

Its restaurants stable, which includes Table Table, Brewers Fayre and Beefeater, saw like for like sales grow 3.3 per cent, thanks in part to its value for money offers.

In its results for the financial year ending 3 March 2011, Whitbread saw total revenue for the group increase 11.5 per cent to £1,599.6m. Operating profits for its hotels and restaurants increased 14.7 per cent to £283.4m, while those for its Costa brand rose 38.4 per cent to £50.1m.

Andy Harrison, chief executive of Whitbread, said: “These results demonstrate the strength of Whitbread's competitive position and market opportunity. Growth in our like for like sales remains firmly positive, although at a lower level than that achieved in the fourth quarter of 2010/11.

“Despite a more challenging consumer economy, we are confident that we will continue to outperform, based on the strength of our brands and our customer propositions. Our emphasis is on giving customers value for money, winning market share and keeping a tight control of costs.

“We see a significant opportunity for Whitbread, building on our good returns on capital and the availability of quality sites. We are already growing faster and will add around 4,000 new Premier Inn UK rooms and around 300 Costa stores this year and we have set new five year milestones.

“This is an exciting and profitable plan to build on Whitbread‟s success and to create substantial value for our shareholders.”

Whitbread also plans to double its Costa estate to 3,500 stores within the next five years.