Premier Inn blames 'weak' hotel market for RevPAR slump

By Sophie Witts contact

- Last updated on GMT

Premier Inn blames 'weak' hotel market for RevPAR slump

Related tags: Hotel

Premier Inn is on track to open a further 4,500 rooms this year despite a ‘weaker than expected’ hotel market slowing growth.

The budget chain saw total sales rise eight per cent in the 13 weeks to 2 June, but total RevPAR slumped by 1.2 per cent.

Alison Brittain - chief executive of Premier Inn's parent company Whitbread - blamed poor ‘market conditions’ for the decline.

The drop was particularly evident in London, where total RevPAR was down six per cent, despite a 5.6 per cent rise in total sales for the quarter.

In the regions Premier Inn grew total sales by 8.5 per cent, but RevPAR fell 0.2 per cent.

Brittain said the decline reflected a ‘dilution’ effect caused by the ongoing expansion of the hotel chain, with 3,600 new rooms opening in the final quarter of 2015 alone.

But she added that the firm was still on track to open a further 4,000-4,500 hotel rooms in 2016/2017.

“Despite current market conditions, with the benefit of our cost efficiency programme we remain confident of making good progress for the full year,” said Brittain.

Whitbread's overall results were buoyed by the continual growth of its Costa brand, which saw total sales rise by 11.5 per cent.

Brittain said: “We remain on plan to open 230-250 Costa stores worldwide and have increased our target to install at least 1,250 new Costa Express machines this year.”

Pre-tax profits at Whitbread rose five per cent to £488m in the last financial year.

Related topics: Business, Hotels

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