Whitbread will increase development spending by £100m next year as it aims for a 125,000-room portfolio.
The Premier Inn owner said it would increase gross capex to between £500m and £550m in 2024, up from previous guidance of between £400m and £450m.
Whitbread said this would be partially funded by the proceeds from disposals, which it expected to be between £50m and £100m.
Whitbread said it did not expect supply to return to pre-pandemic levels for at least five years, while demand is already strong. “We are therefore seeking opportunities to grow our pipeline towards our long-term potential of 125,000 rooms across the UK and Ireland, whilst continuing to maintain our financial discipline,” it said.
It currently has 83,000 rooms, following its expansion in Germany, with most of those sited in its 800-plus UK Premier Inn hotels.
The long-term target would require it to build a further 400 hotels.
The group’s interim results this morning showed revenue for H1 up by 17% to £1.57bn, with adjusted pretax profit up by 44% to £391m, which was ahead of expectations.
Whitbread chief executive Dominic Paul said: “The group is in excellent shape, trading well and has significant growth potential, both in the UK and Germany.
“Given the structural shift in hotel supply and by continuing to invest in our assets, our brand and our teams, we remain confident that we can both extend our market leading position in the UK and replicate that success in Germany.”
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