Premier Inn owner Whitbread plans to pour more than £350m into new hotels and an accompanying marketing campaign, despite posting a record £1bn loss during the pandemic.
Sales plummeted by 71% to £589.4m in the year to the end of February because of hotel closures and lockdown restrictions since last March. Although 92% of its hotels in the UK are open again, that remains only for essential business travel.
Meanwhile, more than one-third of its hotels in Germany, another key market for the company, remain closed as the country suffers another Covid-19 wave.
Whitbread said it swung to a pretax loss of £1.01bn because of a £348m impairment charge on its German portfolio, caused by the return to lockdown measures across the continent and a subsequent hit on Whitbread’s European growth.
Net debt including lease liabilities increased by 11% to £3.28bn. The company is aiming for £100m of cost cuts by 2024.
However, it will also invest £350m this year into opening between 2,000 and 3,000 new rooms in the UK and 2,000 in Germany. The move will be accompanied by a major marketing campaign, Whitbread’s first in three years, featuring British comedian Lenny Henry.
Chief executive Alison Brittain said the UK’s speedy vaccination programme would help the company, which is planning to reopen all of its UK hotels and restaurants to leisure customers from 17 May.
“We expect a significant bounce in leisure demand in our tourist locations during the summer, followed by a gradual recovery in business and event-driven leisure demand,” she said.
Whitbread received £270m in financial support from the government, including furlough payments. Its cash position stood at £1.26bn in February, after a £1bn rights issue in June and a £550m green bonds issue earlier this year.
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