Whitbread hails 'resilient' UK third quarter despite Omicron

Premier Inn owner Whitbread hailed a "resilient" third-quarter performance in the UK on Wednesday despite the emergence of the Omicron variant, but said trading in pubs and restaurants remained more challenging.

The company said total UK sales rose 3.1% compared with FY20, with food and beverage sales down 11.1%. Total accommodation sales at Premier Inn were up 10.6%, while like-for-like UK accommodation sales were 5.5% higher, driven by strong leisure demand and recovering business demand.

The group said its 32 open hotels in Germany achieved occupancy levels of 59.9%, up from 47.5% in the second quarter and in line with the market.

Whitbread said the emergence of the Omicron variant dented demand in December and throughout the festive period, but Premier Inn UK total accommodation sales continued to outperform the market, up 5.1%. It continues to expect Premier Inn UK LFL revenue per available room run rates to recover to pre-Covid levels this year.

However, total UK sales were 4.4% lower than in the same period a year ago, with total food and beverage sales down 17.2%. Recent weeks have been hit by the Omicron variant and increased government restrictions on eating out in Scotland, Wales and Northern Ireland, it said.

In Germany, increased government restrictions are acting as a "significant" market drag, with Premier Inn occupancy levels at 36.4%, down from 59.9% but still in line with the market.

Chief executive Alison Brittain said: "Q3 represented another strong performance in the UK with Premier Inn continuing to trade significantly ahead of the market. High levels of leisure demand and improving business demand helped maintain like-for-like accommodation sales ahead of pre Covid-19 levels.

"UK accommodation sales remained resilient in December, albeit softening as we moved through the month and into the festive period as a result of the onset of the Omicron Covid-19 variant. Whilst our hotel performance was excellent, the value pub and restaurant sector in which we operate remains more challenging."